WHITE PAPER:
OPTIONS FOR A TREATY ON BUSINESS AND HUMAN RIGHTS
Prepared for the American Bar Association, Center for Human Rights, and
The Law Society of England and Wales
May 2015
By:
Professor Douglass Cassel
Notre Dame Law School
Notre Dame, Indiana USA 46556
Professor Anita Ramasastry
University of Washington School of Law
4293 Memorial Way Northeast
Seattle, Washington USA 98195
Authors’ Note: This paper was co-commissioned by the American Bar Association (“ABA”) Center for
Human Rights and the Law Society of England and Wales, and will be released publicly in July 2015 pending
formal approval by both organizations. The ABA is a non-governmental, voluntary bar association with nearly
400,000 members globally. The Law Society is the independent professional body for the more than 160,000
solicitors in England and Wales.
Views expressed in this paper are strictly those of the authors and not necessarily those of the ABA or its
Center for Human Rights, or of the Law Society. The views expressed herein have not been approved by the House
of Delegates or the Board of Governors of the ABA and, accordingly, should not be construed as representing the
policy of the ABA. The materials contained herein represent the opinions of the authors and should not be
construed to be those of either the ABA or the ABA Center for Human Rights unless adopted pursuant to the bylaws
of the ABA. Nothing contained herein is to be considered as the rendering of legal advice for specific cases, and
readers are responsible for obtaining such advice from their own legal counsel. This paper is intended for
educational and informational purposes only.
Contents:
Page:
EXECUTIVE SUMMARY
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I.
INTRODUCTION
1
II.
BACKGROUND AND CONTEXT
1
A. UN Mandate of John Ruggie on Business and Human Rights
B. UN Framework on Business and Human Rights:
“Protect, Respect, Remedy”
C. UN Guiding Principles on Business and Human Rights
D. Debate Over a Treaty on Business and Human Rights
E. Continued Implementation of UN Guiding Principles
2
III.
IV.
EXISTING INTERNATIONAL LEGAL OBLIGATIONS OF BUSINESS
WITH RESPECT TO HUMAN RIGHTS
2
4
5
8
9
TREATY OPTIONS
11
A. National Action Treaties
13
1.
2.
3.
4.
5.
6.
7.
8.
Business Reporting
National Planning
Business Implementation of Guiding Principles
Framework Treaty
National Criminalization and International Cooperation
National Prevention, Sanctions and International Cooperation
National Civil Remedies
Comprehensive National Protection
B. International Supervision Treaties
1.
2.
3.
4.
5.
6.
21
State Reports to an International Body
Individual Complaints to an International Treaty Body
International Civil Adjudication
International Mediation and Arbitration
International Criminal Prosecution
Comprehensive Treaty
C. Policy Coherence Treaties
1.
2.
14
15
15
17
18
19
20
21
21
22
23
24
25
27
27
National Laws
International Agreements
27
28
D. Sectoral Treaties
28
i
V.
SELECTED KEY ISSUES
28
A.
B.
C.
D.
E.
F.
G.
29
30
31
32
34
35
36
What companies are to be regulated?
What human rights are to be enforced?
Will international or domestic norms govern civil damages suits?
Will States Parties exercise extraterritorial jurisdiction?
What is the scope of parent company and subsidiary liability?
Will the treaty impose direct obligations on business?
What is the role of lawyers and business advisors?
CONCLUSION
36
Acknowledgments: The authors have received numerous valuable comments on earlier drafts of this Paper from
experts in the field of business and human rights. We acknowledge our indebtedness and gratitude for their
contributions. Rather than risk inadvertent omissions or selectivity, we hereby thank them all collectively. Any
errors are, of course, those of the authors.
ii
Executive Summary
I.
Introduction
The United Nations Human Rights Council decided in June 2014 to establish an Intergovernmental
Working Group to “elaborate an international legally binding instrument to regulate, in international human rights
law, the activities of transnational corporations and other business enterprises.” The first meeting of the Working
Group will take place in Geneva in July 2015.
The Council did not further specify what sort of instrument should be drafted. The Center for Human
Rights of the American Bar Association and the Law Society of England and Wales invited the present authors to
prepare a “White Paper” on possible options for a treaty on business and human rights.
The Paper takes no position for or against a treaty, or any particular form or content of a treaty. It is purely
informational. It represents the views only of its authors, not necessarily those of the American Bar Association or
its Center, or of the Law Society. Although other experts provided helpful comments on earlier drafts, the authors
are solely responsible for the content.
The Paper begins by summarizing the context of the treaty process and current international law on
business and human rights. It then addresses three main topics:

Treaty Options: The wide variety of forms and content a treaty could take;

Templates: Forms of treaties that enjoy broad support in international law, which could serve as templates
for a treaty on business and human rights; and

Cross-cutting issues: Issues of international law and policy that drafters may need to address, regardless of
the form and content of a treaty (companies covered; applicable rights; law governing civil damages suits;
geographic scope of State duties; parent company responsibilities; and whether to impose duties only on
States or directly on business).
II.
Background and Context
A broad consensus has emerged that business has a responsibility to respect human rights. A recent survey
reports that senior executives of companies “overwhelmingly perceive a responsibility to protect human rights.” In
2014 all member States of the UN Human Rights Council called upon “all business enterprises to meet their
responsibility to respect human rights in accordance with the [UN] Guiding Principles [on Business and Human
Rights].”
This consensus is reflected in the UN Framework on Business and Human Rights, endorsed by the Council
in 2008, and the UN Guiding Principles on Business and Human Rights, endorsed by the Council in 2011. The
Framework has three “Pillars”:

The State duty to protect against human rights abuses by business (Pillar One);

The business responsibility to respect human rights (Pillar Two); and

The responsibility of States and business to provide effective access to remedies (Pillar Three).
While the business responsibility to respect human rights arises partly from existing law, it rests more
generally on the “basic expectation society has of business,” which is part of a company’s “social license to
operate.” The business responsibility is twofold. First, companies should not violate human rights. Second, they
should exercise “due diligence” to anticipate and avoid or mitigate adverse impacts on human rights arising from
their activities.
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All three Pillars of the Framework were elaborated by the 2011 UN Guiding Principles, which provide
more specific guidance for States and business. Implementation of the Guiding Principles is now being promoted by
international bodies; States; many businesses and industry associations; bar associations; civil society; and a UN
Working Group of five independent experts.
Nonetheless, doubts about the effectiveness of this “soft law” approach, especially with regard to remedies
for victims, led Ecuador and South Africa in 2014 to ask the UN Human Rights Council to begin a process to draft a
legally binding treaty. By a plurality vote of 20 States in favor, 14 opposed, and 13 abstaining, the Council agreed
to establish an Intergovernmental Working Group to “elaborate an international legally binding instrument to
regulate, in international human rights law, the activities of transnational corporations and other business
enterprises.” The Group’s first meeting will take place in Geneva in July 2015.
III.
Existing International Legal Obligations of Business with Regard to Human Rights
Current international law imposes certain human rights obligations on business, but the coverage is
incomplete, indirect and largely ineffective. International human rights law obligates States to protect human rights
from infringement by business, but the obligations relating to business are vague and general. International labor
law and international criminal law impose specific obligations on business, but their coverage is narrow. Most
treaties in all three bodies of law are not universally ratified, and none grants victims effective remedies against
companies.
IV.
Treaty Options
There is a wide range of possibilities for the form and content of a treaty on business and human rights.
They range from a comparatively weak treaty that would simply mandate public reporting by large companies, to a
strong treaty with civil and criminal remedies in national and international courts.
The global coalition of NGO’s calling for a treaty, as well as the lead governmental sponsors, advocate a
treaty that comes closer to the “hard” end of the spectrum. However, it is not clear that any treaty that ultimately
emerges from a drafting process will meet these objectives. Most options outlined in this Paper would not fully
meet the goals of leading treaty proponents, such as Ecuador and the global NGO coalition, to provide broad
accountability for companies and accessible remedies for victims.
This Paper does not attempt to catalogue all treaty options; there are simply too many. It outlines
illustrative options, each modeled partly on existing international law binding States in regard to human rights, anticorruption or environmental law. Each potential template is already either widely ratified or recently adopted. Thus
there is reason to believe that its form, at least, may be generally acceptable to States.
The Paper presents the options in two broad categories: treaties mandating mainly national action; and
treaties establishing international enforcement machinery. (A treaty could of course mandate both.) Within each
category, the listing proceeds, roughly speaking, from relatively “weak” to relatively “hard” options. Each option
could constitute either an entire treaty, or one component of a broader treaty. The Paper notes advantages and
disadvantages of each treaty option.
A. National Action:
1.
Business Reporting: A treaty might require corporations to report publicly on their human rights policies,
risks, outcomes and indicators.
2.
State Planning: A treaty might require States to adopt National Action Plans to implement the UN Guiding
Principles and other norms.
3.
Business Implementation of Guiding Principles: A treaty might commit States to require business to carry
out its responsibilities under Pillars Two and Three of the UN Guiding Principles. In particular, States
might require business to exercise human rights “due diligence.”
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4.
Framework Treaty: A treaty might initially adopt a generally worded “framework,” committing States only
to broad principles, later to be supplemented by more specified duties, through additional protocols (i.e.,
treaty supplements) or actions, based on review of experience over time.
5.
Criminalization: A treaty might specify certain internationally recognized crimes against human rights, and
require States to prosecute corporations and corporate executives and to cooperate with each other in doing
so. The form of such a treaty could be modeled on the OECD Convention on Combating Bribery of
Foreign Public Officials in International Business Transactions. Such a treaty might also provide a defense
or mitigation for companies that could demonstrate they had robust due diligence programs in place.
6.
Prevention: A treaty might require criminal prosecution and international cooperation, but add provisions
requiring States to seek to prevent human rights violations by business through policies, practices, periodic
review, independent prevention bodies, reporting and international collaboration. The form could be
modelled on the widely ratified UN Convention against Corruption.
7.
Civil Remedies: A treaty might require States to provide civil damages remedies for victims of human
rights violations in which business is involved. Legal and practical barriers to access to justice would need
to be addressed.
8.
Comprehensive National Protection: Existing human rights treaties impose wide-ranging duties on States
to protect people from human rights violations, including violations committed by third parties. A treaty
might make explicit and precise how States must implement those treaties with regard to business.
B. International Supervision:
1.
State Reports: A treaty might require States periodically to report to committees of international experts on
progress and obstacles in implementing their treaty obligations. As with current human rights treaties, the
reporting process might allow civil society to submit “shadow reports,” and authorize the committee to
dialogue with States in public hearings and to publish concluding observations. This commitment would
need to be harmonized with other UN treaty reporting procedures.
2.
Individual Complaints: A treaty might follow existing UN human rights treaties, which allow individuals to
file complaints against States before expert treaty bodies, once the complainants exhaust domestic remedies
or show good cause for not doing so. A threshold question is whether to allow complaints against States,
companies, or both. The answer might depend on the nature of the obligations imposed by the treaty, and
on whether they mandate conduct by States, companies, or both. A complaint procedure might build on the
existing procedure before “National Contact Points” under the OECD Guidelines for Multinational
Enterprises.
3.
International Civil Adjudication: A treaty might establish an international court to hear civil complaints,
and to issue legally binding judgments granting reparations to victims, against States or companies or both.
Regional human rights courts in Europe, Africa and the Americas currently order such reparations against
States.
4.
International Mediation and Arbitration: A treaty might create or make use of an international arbitral
tribunal to hear complaints by victims against companies allegedly involved in human rights violations. A
proposal to create such a tribunal has recently been circulated; if that tribunal is established beforehand, a
treaty might then mandate States to require companies to submit to its jurisdiction, or the treaty itself might
require business to submit to its jurisdiction.
5.
International Criminal Prosecution: A treaty might authorize companies and business executives to be
prosecuted before an international criminal court. The existing International Criminal Court can prosecute
individuals, including business executives, for genocide, war crimes and crimes against humanity. A
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Protocol recently adopted by the African Union, but not yet entered into force, would both broaden the list
of international crimes that could be prosecuted before the African Court of Justice and Human and
Peoples’ Rights, and permit corporations to be prosecuted.
6.
Comprehensive treaty: The foregoing potential elements of a treaty are not mutually exclusive. A treaty
could combine some or all, and others besides. Including more elements could make a treaty more
effective. On the other hand, the more ambitious the treaty, the more difficult it may become to negotiate
and to attract States to join it.
C. Policy Coherence Treaties:
1.
National Laws: The UN Guiding Principles call on States to ensure that their laws and institutions affecting
business are coherent with their duty to protect human rights. Examples include “corporate law and
securities regulation, investment, export credit and insurance, trade and labour” as well as professional
codes regulating the legal profession. A treaty might require States to review their laws, or to adopt
particular measures (such as including human rights criteria in public procurement policies), to ensure
policy coherence.
2.
International Agreements: The Guiding Principles further provide that “States should maintain adequate
domestic policy space to meet their human rights obligations when pursuing business-related policy
objectives with other States or business enterprises.” States might agree, for example, to include human
rights protections in future investment and trade treaties. They could also agree to treat human rights
conditions as terms of existing treaties.
D. Sectoral Treaties: It would also be possible to adopt a narrower treaty, focusing on a particular sector or on
business involvement in certain kinds of human rights abuses.
V.
Selected Key Issues
Whatever form or content of treaty is selected, a number of cross-cutting issues will need to be considered:
A. Companies to regulate: UN resolutions cover transnational corporations “and other business enterprises.”
The UN Guiding Principles apply to “all” business enterprises, although the extent of “due diligence”
required may vary with the size of a business. Yet a preambular footnote in the Human Rights Council
resolution initiating the treaty process appears to limit “other business enterprises” to those with a
“transnational character.” Treaty drafters will need to consider this controversial limitation.
B. Human rights norms: The range of human rights covered by the treaty may depend on the duties it imposes.
Reporting and planning might cover a broad range of rights. The UN Guiding Principles recognize the
business responsibility to respect, at minimum, all rights in the Universal Declaration of Human Rights; the
International Covenant on Civil and Political Rights; the International Covenant on Economic, Social and
Cultural Rights; and the ILO Declaration of Fundamental Principles and Rights at Work. Other rights may
apply in specific circumstances. On the other hand, individual complaints or civil damages remedies might
be limited to “justiciable” rights. And criminal prosecutions would apply only to crimes under existing
law, or any new crimes recognized by the treaty.
C. Law governing civil damages claims: If the treaty authorizes a civil damages remedy in national courts, it
might do so either for violations of international human rights law, or for violations of domestic tort law.
Human rights claims would more appropriately recognize the gravity of violations, but domestic tort/delict
standards might be more familiar to local judges and easier to apply. One solution might be to contemplate
both kinds of remedies.
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D. Extraterritorial jurisdiction: International law allows States to engage in reasonable exercises of jurisdiction
over the conduct of their corporations in other States. A treaty might explicitly authorize, or even require,
States to exercise jurisdiction over human rights violations committed by their companies outside their
territories.
E. Parent company responsibility: In regard to reporting, planning and prevention, there is precedent to require
parent companies to exercise due diligence to make sure that subsidiaries and other entities in the enterprise
meet their responsibilities. In regard to civil or criminal liability, however, most States recognize the
separate entity doctrine which treats parents and subsidiaries as different legal entities. Typically the parent
cannot be held legally liable for wrongs committed by the subsidiary, except in very limited circumstances
in which the corporate “veil” is pierced. On the other hand, recent developments in common law
jurisdictions recognize that, in some circumstances, parent companies can be held liable for breaching a
“duty of care” owed to persons injured by their subsidiaries. Drafters will need to consider such issues
under the treaty.
F.
Direct obligations on business: Eminent scholars disagree on whether corporations are subjects of
international law. Pragmatists argue that the issue of whether or not corporations are “subjects” of
international law is irrelevant to the question of what legal responsibilities can be imposed on them.
Current investment and trade treaties grant corporations both substantive and remedial rights. Drafters
might address whether a treaty should also impose duties on corporations.
G. Lawyers and business advisors: Bar Associations, lawyers and others advising companies need to take into
account the responsibility of business to respect human rights. Treaty drafters might wish to ensure policy
coherence of professional codes regulating the legal profession with State duties to protect human rights
from infringement by business.
CONCLUSION
This Paper is presented in the belief that an informed negotiating process deserves, at the outset, a basic
awareness of the main options, issues and choices that lie before the drafters.
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I.
INTRODUCTION
A plurality of the United Nations Human Rights Council member States decided in June 2014 to establish
an Intergovernmental Working Group “to elaborate an international legally binding instrument to regulate, in
international human rights law, the activities of transnational corporations and other business enterprises.”1
Led by Ecuador and South Africa and supported by 20 Council member States (14 States opposed,
including the US and the UK, while 13 abstained), and preceded by advocacy by hundreds of civil society
organizations, the Council thus initiated a process to draft a treaty on business and human rights. The first meeting
of the Working Group is to take place in Geneva in July 2015; the drafting process will likely take years.
There are many questions as to what will happen once the Working Group convenes. Will the negotiations
succeed? If there is to be a treaty on business and human rights, what kind of treaty? Possibilities range from a
treaty imposing minimal reporting requirements on corporations to one authorizing a special court where business
entities may be sued or criminally prosecuted for human rights violations. What are the key issues the drafters will
need to address under various treaty options? And if some form of treaty is adopted, what are its chances of being
widely ratified by States? Or will it risk becoming, in effect, an international law orphan?
The American Bar Association Center for Human Rights, and the Law Society of England and Wales
invited the present authors to prepare an informational “White Paper” on these questions. The Paper does not intend
to advocate either for or against a treaty on business and human rights. Nor does it undertake to support or oppose
any particular form or substance of a treaty. Its purpose is purely informational: to educate ABA and Law Society
members and other interested persons about treaty issues and options. Views expressed in this Paper are strictly
those of the authors, and not necessarily those of the ABA or its Center for Human Rights, or of the Law Society.
The remainder of this Paper is divided into four sections: background and context; existing international
legal obligations of business in regard to human rights; options for the content of a treaty; and selected key issues.
II.
BACKGROUND AND CONTEXT.
A generation ago it was often argued that only States had institutional responsibilities to safeguard human
rights, and that only State actors could violate human rights. In recent years the predominant view has changed
dramatically. By 2014 a reputable survey indicated that senior corporate executives “overwhelmingly perceive a
responsibility to protect human rights,” 2 while all 47 member States of the UN Human Rights Council (including the
US), acting by consensus, called upon “all business enterprises to meet their responsibility to respect human rights in
accordance with the [UN] Guiding Principles [on Business and Human Rights].” 3
How did we arrive at this new consensus?
This Paper is not the place to recount the long and tortuous history of debates in the UN over business and
human rights, going back at least to the 1970s.4 We focus here on only the latest chapter of that history, beginning a
little more than a decade ago.
1
UN HRC Res. 26/9, 26 June 2014, Elaboration of an international legally binding instrument on transnational
corporations and other business enterprises with respect to human rights, par. 9.
2
Economist Intelligence Unit, Report Summary, accessible at http://www.economistinsights.com/businessstrategy/analysis/road-principles-practice. In a late 2014 survey of some 850 senior corporate executives, the
Economist found that companies “overwhelmingly perceive a responsibility to protect human rights.” Over 80% of
execs surveyed agreed that business is “an important player in respecting human rights.”
3
Resolution 26/22, Human rights and transnational enterprises and other business enterprises, UN Doc.
A/HRC/26/22, 15 July 2014, par. 3.
4
See the helpful summary in John Ruggie, Quo Vadis? Unsolicited Advice to Business and Human Rights Treaty
Sponsors, Sept. 9, 2014, Institute for Human Rights and Business, accessible at
http://www.ihrb.org/commentary/quo-vadis-unsolicited-advice-business.html.
1
A. UN Mandate of John Ruggie on Business and Human Rights
In 2005 the UN Commission on Human Rights (later reconstituted as the Human Rights Council) asked
UN Secretary-General Kofi Annan to appoint a special representative on the issue of “human rights and
transnational corporations and other business enterprises.”5 Annan appointed Harvard University political scientist
John Ruggie. The focus of Ruggie’s mandate, and of business and human rights discourse, has paid special (but not
exclusive) attention to the role of transnational businesses and their investments and operations in host States –
addressing issues of the impact of such companies in operations outside of their home jurisdictions.
Ruggie’s initial mandate was, among other things, to “identify and clarify standards of corporate
responsibility and accountability for transnational corporations and other business enterprises with regard to human
rights;” and to “elaborate on the role of States in effectively regulating and adjudicating the role of transnational
corporations and other business enterprises with regard to human rights, including through international
cooperation.” 6
Ruggie’s appointment flowed from a decision of the UN Human Rights Council not to adopt an earlier
instrument that attempted to define the legal responsibilities of corporations with respect to human rights. The draft
"Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to
Human Rights" were approved in 2003 by the United Nations Sub-Commission on the Promotion and Protection of
Human Rights. The Norms applied a long list of treaties and international instruments to transnational
corporations.7 Critics of the Norms, among other objections, viewed them as too prescriptive.8
While non-binding, the Draft Norms were crafted with the aspiration to extend human rights obligations to
companies as well as states. The preamble recognized that even though States have the “primary responsibility” to
protect human rights, “transnational corporations and other business enterprises, as organs of society, are also
responsible for promoting and securing the human rights set forth in the Universal Declaration of Human Rights."
The draft Norms also stated as an objective that every effort should be made that the norms be “generally known and
respected.”
The draft Norms were considered by the UN Commission on Human Rights in 2004. The Commission
"express[ed] its appreciation to the Sub-Commission for the work it has undertaken in preparing the draft norms"
and said they contained "useful elements and ideas for consideration." But it did not approve them and said they had
"no legal standing."9 Special Representative of the Secretary-General (“SRSG”) Ruggie was then appointed so that
the UN could undertake a more systematic study of the issue of human rights and transnational corporations and
other business enterprises.
B.
UN Framework on Business and Human Rights: “Protect, Respect, Remedy”
After extensive studies and consultations with diverse stakeholders worldwide, in 2008 Ruggie
recommended a three-part “Framework” on business and human rights: “Protect, Respect and Remedy.”10 In
summary, the Framework “comprises three core principles:”

“the State duty to protect against human rights abuses by third parties, including business;”

“the corporate responsibility to respect human rights; and”
5
UN Commission on Human Rights, res. 2005/69, Human rights and transnational corporations and other business
enterprises, 20 April 2005.
6
Id.
7
Draft Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to
Human Rights, UN Doc. E/CN.4/Sub.2/2003/12 (2003).
8
For a summary critique, see John Ruggie, Interim Report, UN Doc. E/CN.4/2006/97, Feb. 2006, pars. 56-69.
9
UN Commission on Human Rights, Decision 2004/116, 20 April 2004.
10
John Ruggie, Protect, Respect and Remedy: a Framework for Business and Human Rights, UN Doc. A/HRC/8/5,
7 April 2008.
2

“the need for more effective access to remedies.”
“The three principles form a complementary whole in that each supports the others in achieving sustainable
progress.”11
Ruggie explained:
“Business is the major source of investment and job creation, and markets can be highly efficient means for
allocating scarce resources. They constitute powerful forces capable of generating economic growth,
reducing poverty, and increasing demand for the rule of law, thereby contributing to the realization of a
broad spectrum of human rights. But markets work optimally only if they are embedded within rules,
customs and institutions. Markets themselves require these to survive and thrive, while society needs them
to manage the adverse effects of market dynamics and produce the public goods that markets undersupply.
…”12
Ruggie identified the “root cause” of contemporary problems involving business and human rights as
“governance gaps”:
“governance gaps created by globalization - between the scope and impact of economic forces and actors,
and the capacity of societies to manage their adverse consequences. These governance gaps provide the
permissive environment for wrongful acts by companies of all kinds without adequate sanctioning or
reparation. How to narrow and ultimately bridge the gaps in relation to human rights is our fundamental
challenge.”13
The three-part Framework was Ruggie’s response to those governance gaps. Under existing international
human rights law, he noted, States have the legal duty to protect persons within their jurisdiction from human rights
violations, including those committed by business 14 (or in which business is complicit15). This has come to be
known as “Pillar One” of the three-part Framework.
What is now called “Pillar Two” of the Framework is the business responsibility to respect human rights.
Ruggie articulated the general business “responsibility to respect,” not as a new international legal obligation, but as
a duty assumed “because it is the basic expectation society has of business.”16 It is “part of what is sometimes called
a company’s social license to operate.”17
Ruggie noted that international organizations such as the International Labour Organization and the
Organization for Economic Cooperation and Development, as well as major business organizations, and the
thousands of individual companies that have joined the UN Global Compact, recognize that business has a
responsibility to respect human rights. 18
What does the business responsibility to respect human rights mean? In essence it has two components.
The first is a negative obligation: “To respect rights essentially means not to infringe on the rights of others - put
simply, to do no harm.”19
The second is a positive responsibility: “What is required is due diligence - a process whereby companies
not only ensure compliance with national laws but also manage the risk of human rights harm with a view to
avoiding it, mitigating it and providing remediation in the event harm occurs. The scope of human rights-related due
11
Id. at 1 (emphasis added).
Id., p. 3 par. 2.
13
Id., p. 3 par. 3.
14
Id., pp. 7-8, pars. 18-22.
15
Id., pp. 20-21, pars. 73-81.
16
Id., pp. 4-5, par. 9.
17
Id., pp. 16-17, par. 54.
18
Id., p. 8 par. 23.
19
Id., p. 9 par. 24.
12
3
diligence is determined by the context in which a company is operating, its activities, and the relationships
associated with those activities.”20
These dual responsibilities apply to all human rights as enumerated in a core set of human rights treaties:
“Because companies can affect virtually all internationally recognized rights, they should consider the responsibility
to respect in relation to all such rights, although some may require greater attention in particular contexts.”21
Finally, meeting these two responsibilities is not always enough: “There are situations in which companies
may have additional responsibilities - for example, where they perform certain public functions, or because they
have undertaken additional commitments voluntarily. But the responsibility to respect is the baseline expectation for
all companies in all situations.”22
The Third Pillar of the Framework requires a remedy for victims when human rights violations occur.
States have a responsibility to provide both judicial and non-judicial remedies, while business has a responsibility to
provide non-judicial remedies for violations in which it is involved.23
By consensus, the UN Human Rights Council formally “welcome[d]” Ruggie’s three-part Framework and
recognized the “need to operationalize” it. Extending his mandate for three years, the Council asked him to
elaborate on the Framework, and encouraged governments, business and civil society to cooperate with him. 24
C. UN Guiding Principles on Business and Human Rights
After further research and consultations, Ruggie in 2011 presented a set of some 31 “Guiding Principles on
Business and Human Rights,” together with commentaries on each Principle.25 Principles 1-10 cover the State duty
to protect; Principles 11-24 detail the business responsibility to respect; and Principles 25-31 address the need to
provide victims access to effective remedies. Noting the “painfully slow” nature of treaty negotiations, Ruggie
stated that he had considered and ruled out the treaty option “at this time” (in order to focus initially on what he
viewed as a more timely means to close the governance gap and to provide victims access to a remedy sooner rather
than later.26 (Ruggie’s position, as discussed below, has evolved since then.)
The UN Human Rights Council, again by consensus, formally “endorse[d]” the Guiding Principles,27 now
known as the “UN Guiding Principles.” In addition to the ongoing mandate of the UN High Commissioner for
Human Rights, the Council established a Working Group of five independent experts to monitor and promote
effective implementation of the Guiding Principles. 28 It also established an annual Forum on Business and Human
Rights, under the guidance of the Working Group, to facilitate dialogue and exchange on implementation of the
20
Id., p. 9 par. 25.
Id., p. 9, par. 24. The UN Guiding Principles on Business and Human Rights, later drafted by Ruggie and
endorsed by the Human Rights Council in 2011, specifically identify, as a minimum set of human rights instruments
to be respected by business in all contexts, the Universal Declaration of Human Rights; the International Covenant
on Civil and Political Rights; the International Covenant on Economic, Social and Cultural Rights; and the
International Labour Organization’s Declaration of Fundamental Principles and Rights at Work. Guiding Principle
12, in Guiding Principles, note 25 below. See generally section V.B below.
22
Id.
23
Id., p. 24 et seq.
24
UN Human Rights Council, res. 8/7, Mandate of the Special Representative of the Secretary-General on the issue
of human rights and transnational corporations and other business enterprises, 18 June 2008.
25
John Ruggie, Guiding Principles on Business and Human Rights: Implementing the United Nations ‘Protect,
Respect and Remedy’ Framework, UN Doc. A/HRC/17/31, 21 March 2011.
26
John Ruggie, Treaty road not travelled, ETHICAL CORPORATION, May 2008, pp. 42-43. Ruggie also argued that a
treaty-making process “now” could undermine “effective shorter-term measures,” and noted “serious questions”
about how a treaty would be enforced. Id. at 42.
27
UN Human Rights Council, res. 17/4, Human Rights and transnational corporations and other business
enterprises, 16 June 2011, UN Doc. A/HRC/RES/17/4, 6 July 2011, par. 1.
28
Id., par. 6.
21
4
Guiding Principles, as well as on issues of business and human rights generally. 29 The Council also made clear that
its endorsement of the Guiding Principles by no means closed the door on further initiatives. 30
Assisted by the Office of the UN High Commissioner for Human Rights, the expert Working Group has
since 2011 conducted studies and consultations, and issued reports and recommendations. 31 The Working Group
has particularly encouraged States to adopt National Action Plans to implement the Guiding Principles. It has
published a set of guidelines, both for the content of plans and for the process by which plans are adopted.32
Beginning in 2013, several States have adopted National Action Plans, and a dozen or so additional national plans
are currently in preparation (including in the US).33 The UN Guiding Principles emphasize that States have a critical
role to play and can use a “smart mix” of measures – national and international, mandatory and voluntary – to foster
business respect for human rights. 34 Companies, too, have made progress in adopting human rights policies,
strengthening due diligence processes, and in other aspects of implementing the Guiding Principles. 35 The legal
profession has also been active in promoting the Guiding Principles. 36
D.
Debate Over a Treaty on Business and Human Rights
Frustration, however, remains. Many human rights groups report that, on the ground, not much has
improved since the adoption of the Guiding Principles. 37 And there is widespread recognition that Pillar Three of
the Guiding Principles – access to effective judicial and non-judicial remedies – does not seem to have made
meaningful progress. Daunting legal and practical obstacles continue to thwart access to justice for parties adversely
affected by corporate involvement in human rights abuses, especially in the transnational context.38 Indeed, in some
29
Id., par. 12.
As aptly summarized by the International Commission of Jurists, the Resolution “notes that the Guiding Principles
were adopted without prejudice to ‘any future initiatives, such as a relevant, comprehensive international
framework’. [The Resolution] also states that adoption of the Guiding Principles did ‘not foreclose any other longterm development, including further enhancement of standards’ …., and requested the new Working Group … to:
‘continue to explore options and make recommendations at the national, regional and international levels for
enhancing access to effective remedies ...’” International Commission of Jurists, Needs and Options for a New
International Instrument in the Field of Business and Human Rights, June 2014 (hereafter “ICJ Report”), p. 5.
31
See generally its web page at
http://www.ohchr.org/EN/Issues/Business/Pages/WGHRandtransnationalcorporationsandotherbusiness.aspx.
32
UN Working Group on Business and Human Rights, Guidance on National Action Plans on Business and Human
Rights, Version 1.01, December 2014, accessible at
http://www.ohchr.org/Documents/Issues/Business/UNWG_%20NAPGuidance.pdf.
33
See listing at http://www.ohchr.org/EN/Issues/Business/Pages/NationalActionPlans.aspx.
34
UN Guiding Principles, note 25 above at ¶3.
35
See generally, e.g., World Business Council on Social Development, Scaling Up Action on Human Rights:
Operationalizing the UN Guiding Principles on Business and Human Rights (2014), accessible at
http://www.wbcsd.org/Pages/EDocument/EDocumentDetails.aspx?ID=16382&NoSearchContextKey=true. Thirtyfour of the world’s largest 50 companies now have a publicly available statement on human rights. Business and
Human Rights Resource Centre, LAUNCH: Corporate & Government Action on Human Rights Revealed, Feb. 25,
2015, accessible at http://business-humanrights.org/en/launch-corporate-government-action-on-human-rightsrevealed?utm_source=Business+%26+human+rights+-+Weekly+Update&utm_campaign=df1a8c93f3Weekly_Update_25_February_20152_24_2015&utm_medium=email&utm_term=0_3a0b8cd0d0-df1a8c93f3174128041. The first reporting framework specifically on the Guiding Principles has recently been introduced.
Shift and Mazars, UN Guiding Principles Reporting Framework, First Comprehensive Guidance for Companies on
Human Rights Reporting Launches in London, Feb. 24, 2015, accessible at http://www.ungpreporting.org/wpcontent/uploads/2015/02/UNGPRF_launchPR_20Feb20151.pdf.
36
See section V.G below.
37
See., e.g., closing remarks of Audrey Gaughran of Amnesty International in the UN Forum on Business and
Human Rights, Dec. 3, 2014, video accessible at http://webtv.un.org/meetings-events/human-rights-council/forumon-business-and-human-rights/watch/closing-conversation-strategic-paths-forward-forum-on-business-and-humanrights-2014/3925402001001.
38
See generally, e.g., Jennifer Zerk, Corporate Liability for Gross Human Rights Abuses: Towards a Fairer and
More Effective System of Domestic Law Remedies (2014) accessible at
30
5
respects, notably in the United States and the United Kingdom, access to judicial remedies for human rights
violations involving business has actually been limited since the adoption of the Guiding Principles. 39
By 2013 a debate was well underway among governments and within the human rights community. 40
Some argued that the Guiding Principles were still quite new and growing in impact, and that all stakeholders
needed more time to implement them more fully. Others contended that the Guiding Principles were in any event
too weak to overcome what they perceived as business resistance to accountability, and that more time would only
prolong their ineffectiveness. In their view, a more effective, “hard law” tool was needed.
In September 2013 Ecuador, claiming the support of some 85 countries, urged the UN Human Rights
Council to take up the issue of a legally binding treaty on business and human rights. 41 In November 2013, civil
society groups meeting in Bangkok, Thailand issued a Joint Statement echoing the call. 42 More than 600 civil
society groups have now reportedly joined the call for a legally binding treaty.43
In June 2014, as noted above, the UN Human Rights Council decided to establish an Intergovernmental
Working Group “to elaborate an international legally binding instrument to regulate, in international human rights
law, the activities of transnational corporations and other business enterprises.”44
Led by Ecuador and South Africa, the initiative was supported by a plurality of only 20 of the 47 member
States of the Council. Fourteen States opposed and thirteen abstained. There was a notable geopolitical and geoeconomic pattern in the vote. All States voting in favor were from Africa or Asia, except for Cuba, Ecuador, Russia
and Venezuela. The opposing States included all European States on the Council (except Russia), plus the US, UK,
Japan and the Republic of Korea. The abstentions included four major Latin American economies (Argentina,
Brazil, Mexico and Peru), three African States, three Gulf States and one Asian State.
Opposition by the US, UK and European Union States was intense. Not only did they vote against the
resolution, they stated that they would refuse to participate in the Intergovernmental Working Group. The US
objected on multiple grounds, arguing that:

A treaty negotiating process “will unduly polarize these issues.”

States have not had enough time to implement the Guiding Principles, which have already made a
meaningful difference, but which will now be undermined by this “competing initiative.”
http://www.ohchr.org/Documents/Issues/Business/DomesticLawRemedies/StudyDomesticeLawRemedies.pdf; G.
Skinner, R. McCorquodale and O. De Schutter, The Third Pillar: Access to Judicial Remedies for Human Rights
Violations by Transnational Business (2013). The Office of the High Commissioner for Human Rights has
commenced a large work plan focused on the access to remedy for gross human rights abuses – See
http://www.ohchr.org/EN/Issues/Business/Pages/OHCHRstudyondomesticlawremedies.aspx.
39
In the United States, the Supreme Court in 2013 ruled that overseas human rights violations may not be litigated
in federal courts under the Alien Tort Statute except where they sufficiently “touch and concern” the US. Kiobel v.
Royal Dutch Petroleum, 133 S. Ct. 1659 (2013). Cutbacks in UK legal aid funding likewise threaten the ability of
British law firms to pursue overseas human rights violations. See Michael Goldhaber, Corporate Human Rights
Litigation in Non-U.S. Courts: A Comparative Scorecard, 3 UC IRVINE L REV 127, 133-34 (2013).
40
For a wide-ranging analysis of whether a treaty is needed, see ICJ Report, note 30 above, especially pp. 15-33.
41
Business & Human Rights Resource Centre, Calls for a binding treaty on business and human rights –
perspectives, 6 Dec. 2013, accessible at http://business-humanrights.org/en/calls-for-a-binding-treaty-on-businesshuman-rights-perspectives.
42
People’s Forum on Human Rights and Business, Bangkok, Nov.5-7, 2013, Joint Statement: Call for an
international legally binding instrument on human rights, transnational corporations and other business enterprises.
43
FIDH and ESCR-Net New Joint “Treaty Initiative,” Jan. 30, 2015, accessible at
https://www.fidh.org/International-Federation-for-Human-Rights/globalisation-human-rights/business-and-humanrights/16868-fidh-and-escr-net-new-joint-treaty-initiative.
44
UN HRC Res. 26/9, 26 June 2014, par. 9.
6

A one-size-fits-all instrument is not the right approach to the complexities of regulating business.

In contrast to the global applicability of the Guiding Principles, a treaty would bind only states that become
party to it.

An “intergovernmental” working group will not benefit from participation by key stakeholders, including
business.

There are practical questions about how an international binding instrument would apply to corporations,
which, the US contended, are not subjects of international law; yet one of the sponsors proposes to impose
legal obligations directly on businesses.

The resolution seeks to regulate certain businesses and not others. 45
This last objection – that the treaty might regulate some businesses and not others – refers to a footnote in
the preamble to the resolution. The resolution proposes a treaty to regulate “transnational corporations and other
business enterprises.” Yet the preambular footnote explains that the phrase, “other business enterprises,” denotes
“all business enterprises that have a transnational character in their operational activities, and does not apply to local
businesses registered in terms of relevant domestic law.” This seems to exclude any business other than
transnational corporations from the scope of any treaty. (This apparent narrowing of focus from the broader
Guiding Principles will be further discussed in Part V below.)
That issue was among those addressed by John Ruggie in a September 2014 commentary. Cautioning
against the legal and political difficulties inherent in negotiating a treaty on business and human rights, he urged the
sponsors to pursue a treaty that would cover “other business enterprises” as well as transnational corporations; to
appoint a prominent and consensus-seeking chair for the Intergovernmental Working Group; to ensure that the
drafting process is broadly inclusive of outside voices, including business; to conduct basic legal research early in
the process, including on corporate law and international investment law; and to step up efforts to implement the UN
Guiding Principles during the predictably lengthy period of treaty negotiations. 46 A variety of commentators have
begun to argue about the merits of a treaty, with experts lining up on both sides of the debate.
In subsequent remarks at the UN Forum on Business and Human Rights in Geneva in December 2014,
Ruggie noted that the politics of imposing treaty obligations on transnational corporations are becoming ever more
challenging. He pointed out that transnational companies from the global South – from countries like Brazil, China,
India and South Africa – have become the world’s largest in industries like oil, electronics and beer. He reiterated
his earlier calls that any treaty should focus on corporate involvement in “gross” human rights abuses. 47
In that same Forum, Ecuador’s newly named Ambassador to the UN in Geneva, María Fernanda Espinosa,
announced that the first meeting of the Intergovernmental Working Group will take place in Geneva in July 2015.
She stated further that civil society would be welcome to attend, that a treaty should not be limited to transnational
corporations, and that Ecuador and South Africa welcomed submissions beforehand from all interested parties. 48 In
response to this and other statements, an EU representative seemed to leave open whether the EU might participate
45
Permanent Mission of the United States of America to the United Nations and Other International Organizations
in Geneva, US Delegation to the UN HRC, Explanation of Vote, Proposed Working Group Would Undermine
Efforts to Implement Guiding Principles on Business and Human Rights, June 26, 2014, accessible at
https://geneva.usmission.gov/2014/06/26/proposed-working-group-would-undermine-efforts-to-implement-guidingprinciples-on-business-and-human-rights/.
46
John Ruggie, Quo Vadis? Unsolicited Advice to Business and Human Rights Treaty Sponsors, Sept. 9, 2014,
Institute for Human Rights and Business, accessible at http://www.ihrb.org/commentary/quo-vadis-unsolicitedadvice-business.html.
47
John Ruggie, Closing Plenary Remarks, Dec. 3, 2014, Third UN Forum on Business and Human Rights,
accessible at
http://www.ohchr.org/Documents/Issues/Business/ForumSession3/Submissions/JohnRuggie_SR_SG_BHR.pdf.
48
Personal notes of one of the present authors, who attended the presentation by Ambassador Espinosa.
7
after all in the Intergovernmental Working Group. 49 It is unclear at this writing how the business community will
participate in the negotiation process. It appears that a joint set of comments will soon be submitted to the UN by a
coalition of global business organizations.50
E. Continued Implementation of UN Guiding Principles
Meanwhile, the process of implementing the UN Guiding Principles continues. In June 2014, one day after
voting on the controversial resolution on a treaty, the Council adopted a second resolution by consensus.51 This
resolution:

Extends the mandate of the expert Working Group,

Urges States to adopt National Action Plans or similar frameworks,

Calls upon “all business enterprises to meet their responsibility to respect human rights in accordance with
the Guiding Principles,”

Asks the UN High Commissioner on Human Rights to continue “work to facilitate the sharing and
exploration of the full range of legal options and practical measures to improve access to remedy for
victims of business-related human rights abuses, in collaboration with the Working Group,” and

Continues the annual Forum on Business and Human Rights.52
In 2013 the United Kingdom became the first country to publish a National Action Plan. 53 One year later
President Obama announced that the United States would launch a process to develop a National Action Plan for
responsible business conduct, consistent with the UN Guiding Principles and other international instruments.54 The
US process is underway during 2015, with various stakeholder forums being held throughout the country.55 The US
initiative addresses not only human rights, but such other issues as anti-corruption and financial transparency.
This, then, is the state of play as we write this analysis of treaty issues and options in May 2015.
49
Id.
On May 4, 2015, the International Organization of Employers (“IOE”) circulated to other business groups for
comment a draft set of observations on the treaty process, proposed to be submitted by the IOE, together with the
Business & Industry Advisory Committee to the OECD, International Chamber of Commerce, International
Petroleum Industry Environmental Conservation Association, and the World Business Council for Sustainable
Development. Posted excerpts from their initial draft stated that “the UN treaty process must not undermine the
ongoing implementation of the UN Guiding Principles...The UN treaty process should address all companies, not
only multinationals...A potential UN treaty process should build on the UN "protect – respect - remedy"
framework...The UN treaty process should be inclusive...” (Accessible at http://businesshumanrights.org/en/business-organizations-call-for-comments-on-draft-observations-on-un-business-human-rightstreaty-process-22-may.)
51
UN Human Rights Council, res. 26/L.1, Human rights and transnational enterprises and other business enterprises,
23 June 2014, UN Doc. A/HRC/26/L.1. A revised, final version of this text was adopted as Resolution 26/22,
Human rights and transnational enterprises and other business enterprises, UN Doc. A/HRC/26/22, 15 July 2014.
Quotations in the text above are from the final version.
52
The annual Forum on Business and Human Rights is scheduled to take place in Geneva November 16-18, 2015.
53
HM Government, Good Business: Implementing the UN Guiding Principles on Business and Human Rights, Cm
8695, Sept. 2013.
54
White House, Office of the Press Secretary: Factsheet announcing National Action Plan, Sept. 24, 2014.
55
See generally http://www.humanrights.gov/dyn/2015/usg-national-action-plan-on-responsible-business-conduct/.
50
8
III.
EXISTING INTERNATIONAL LEGAL OBLIGATIONS OF BUSINESS WITH RESPECT TO
HUMAN RIGHTS
At present there is no comprehensive global treaty on business and human rights. Nor do the UN Guiding
Principles impose new or additional obligations under international law.56
That does not mean that there are no current international laws imposing human rights obligations on
business corporations or business executives. Such laws exist. But their coverage is scattered, often indirect, and
incomplete.57
Before illustrating such laws, it bears mentioning that the modern human rights project, while Statecentered, has never been exclusively so. The foundational document of international human rights law is the 1948
Universal Declaration of Human Rights. Its prefatory clause proclaims the Declaration as a “common standard of
achievement for all peoples and all nations, to the end that every individual and every organ of society, keeping this
Declaration constantly in mind, shall strive by teaching and education to promote respect for these rights and
freedoms and by progressive measures, national and international, to secure their universal and effective recognition
and observance, …” (Emphasis added.)
Business corporations are, of course, among the “organs of society” thus exhorted, not only to respect
human rights, but also to promote respect for human rights and by progressive measures to secure their effective
observance.
But the prefatory clause of a General Assembly Declaration is not law. What international legal obligations
do business corporations and their executives have to respect human rights?
Most of these obligations are indirect: international law obligates States to use their domestic laws and
institutions to protect the human rights of persons within their jurisdiction, including from violations by third
parties.58 States must require third parties, including business, to refrain from harming people. In some instances
State obligations to safeguard human rights also obligate States to require business to take positive steps to protect
rights, whether by properly training private security forces, providing safe factories and workplaces, or paying
workers a minimum wage.
These State duties derive in part from general human rights treaties joined by States. In the words of Pillar
One of the Guiding Principles, existing international law imposes on States a “duty to protect” persons within their
jurisdiction from human rights violations committed by business. Wide-ranging global and regional human rights
treaties require States Parties to “ensure,” 59 “secure,”60 or “recognize” human rights, 61 and to take measures to give
“The Guiding Principles’ normative contribution lies not in the creation of new international law obligations but
in elaborating the implications of existing standards and practices for States and businesses; …” Introduction to the
Guiding Principles, UN Doc. A/HRC/17/31, par. 14. “Nothing in these Guiding Principles should be read as
creating new international law obligations, or as limiting or undermining any legal obligations a State may have
undertaken or be subject to under international law with regard to human rights.” Guiding Principles, General
Principles (preceding Guiding Principle 1).
57
See generally ICJ Report, note 30 above, pp. 9-33.
58
See generally, e.g., Jean-Francois Akandji-Combe, Positive Obligations under the European Convention on
Human Rights, Human Rights Handbooks, No. 7, Council of Europe (2007), especially pp. 14-16; Eric Engle, Third
Party Effect of Fundamental Rights (Drittwirkung), 5 HANSE LAW REV. 165 (2009).
59
International Covenant on Civil and Political Rights, 16 Dec. 1966, entered into force, 23 March 1976, 999
U.N.T.S. 171, [hereafter “ICPR”], art. 2.2; American Convention on Human Rights, 22 Nov. 1969, entered into
force, 18 July 1978, OAS Treaty B-32, art. 1.1.
60
[European] Convention for the Protection of Human Rights and Fundamental Freedoms, 4 Nov. 1950, entered into
force, 3 Sept. 1953, ETS No. 005, art. 1.
61
African Charter on Human and Peoples’ Rights, 27 June 1981, entered into effect, 21 Oct. 1986, art. 1.
56
9
effect to the rights.62 These commitments require States to take reasonable measures to prevent human rights
violations, by granting State institutions the necessary powers and by using “all those means of a legal, political,
administrative and cultural nature” necessary to prevent violations; to investigate, prosecute, punish, and provide
reparations for violations; and, where possible, to restore rights that have been violated.63
In addition, International Labour Organisation (“ILO”) treaties require States to legislate and enforce
minimum wages, maximum hours, safe working conditions, freedom of association, and so on. While these laws are
formally directed at States, the real objects of regulation, albeit indirectly, are business corporations.
For several reasons, these existing international laws are not adequate to ensure business respect for human
rights. Not all general human rights or ILO treaties are universally ratified; these treaties simply do not bind some
States. While general human rights treaties impose obligations on States, they lack specificity as to the scope of the
duties States must impose on companies. In contrast, ILO treaties are specific, but limited in scope to particular
labor rights and violations.
And in any case, States may lack the will or capacity to carry out even those specific commitments by
which they have agreed to be bound. Many of these treaties lack any mechanism to require a State to live up to its
commitments, outside of public reporting of State performance to a United Nations or relevant international body.
For all these reasons, business may avoid accountability because States have not fully implemented their own duties
with respect to human rights. Transnational businesses may also have different obligations depending on where they
operate – at times working in States that do not have the will or ability to fulfill treaty commitments.
Another category of international laws bearing on business and human rights is international criminal law
for heinous offenses such as genocide,64 war crimes,65 crimes against humanity,66 slavery or forced labor,67 human
ICPR, art. 2.2 (“Where not already provided for by existing legislative or other measures, each State Party …
undertakes to take the necessary steps, in accordance with its constitutional processes and with the provisions of the
present Covenant, to adopt such laws or other measures as may be necessary to give effect to the rights ….”);
American Convention, art. 2: (“Where the exercise of any of the rights or freedoms … is not already ensured by
legislative or other provisions, the States Parties undertake to adopt, in accordance with their constitutional
processes and the provisions of this Convention, such legislative or other measures as may be necessary to give
effect to those rights or freedoms.”); African Charter, art. 1 (States shall recognize rights “and shall undertake to
adopt legislative or other measures to give effect to them.”)
63
Int.Am. Ct. H. Rts., Velásquez Rodríguez v. Honduras, Judgment of 29 July 1988, par. 166. To similar effect, see
UN Human Rights Committee, General Comment 31, Nature of the General Legal Obligation on States Parties to
the Covenant, UN Doc. CCPR/C/21/Rev.1/Add.13 (2004); and African Comm’n Human & Peoples’ Rts., Social and
Economic Rts. Action Center v. Nigeria, Communication No. 155/96, pars. 43-48 (2001).
62
As broadly explained by the Inter-American Court in Velásquez Rodríguez, the State duty to ensure rights “implies
the duty of the States Parties to organize the governmental apparatus and, in general, all the structures through which
public power is exercised, so that they are capable of juridically ensuring the free and full enjoyment of human
rights. … [T]he States must prevent, investigate and punish any violation of the rights recognized by the
Convention and, moreover, if possible attempt to restore the right violated and provide compensation as warranted
for damages resulting from the violation.”
Furthermore: “The State has a legal duty to take reasonable steps to prevent human rights violations and to use the
means at its disposal to carry out a serious investigation of violations committed within its jurisdiction, to identify
those responsible, to impose the appropriate punishment and to ensure the victim adequate compensation.” (Par.
174.) “This duty to prevent includes all those means of a legal, political, administrative and cultural nature that
promote the protection of human rights and ensure that any violations are considered and treated as illegal acts,
which, as such, may lead to the punishment of those responsible and the obligation to indemnify the victims for
damages.” (Par. 175.)
64
See section IV.B (5) below.
65
Id.
66
Id.
67
Supplementary Convention on the Abolition of Slavery, the Slave Trade, and Institutions and Practices Similar to
Slavery, 7 Sept. 1956, entered into force, 30 April 1957, 266 U.N.T.S. 3.
10
trafficking,68 and sexual exploitation of children, 69 all of which in certain circumstances can be committed by nonState actors. Several international treaties explicitly require States to impose legal liability on “legal persons,” such
as business corporations, for involvement in international crimes.70
However, these “worst of the worst” human rights violations are limited to the most purposeful and gross
violations of human rights. A gold mine or oil pipeline that poisons the local water supply, for example, may violate
the human rights to life, health and clean water, but absent proof of malicious intent – a difficult element to prove in
any case – would not likely rise to the level of one of these “gross” and criminal violations. Some states have
domestic criminal legislation that theoretically permits the prosecution of legal persons for international crimes.
This has arisen in part because States that are party to the Rome Statute of the International Criminal Court agreed to
amend their own criminal laws to allow for prosecutions at the domestic level. A number of these jurisdictions allow
for prosecution of corporations as well as natural persons. 71
A new Protocol to the African Court of Justice and Human Rights broadens the list of international crimes
which corporations might commit, and makes clear that corporations can be criminally liable for these crimes. (See
section IV.B (5) below.) But this Protocol has not yet entered into force, its application is untested, and in any event
it will apply only in Africa.
Existing international law, then, is uneven and extremely limited in practice in its application to business
violations of human rights. Nonetheless, it demonstrates that there is no blanket jurisprudential impediment to using
international treaty law to protect human rights from violations or complicity by business. This is true whether the
international law is applied indirectly through States, or directly to business executives or, where national laws
permit,72 directly to business corporations.73
IV.
TREATY OPTIONS
At this early stage there is a wide range of possibilities for the form and content of a possible treaty on
business and human rights. The mandate of the Inter-Governmental Working Group is no more specific than “to
elaborate an international legally binding instrument to regulate, in international human rights law, the activities of
transnational corporations and other business enterprises.”74
68
Protocol to Prevent, Suppress and Punish Trafficking in Persons, Especially Women and Children, supplementing
the United Nations Convention against Transnational Organized Crime, 15 November 2000, 2237 U.N.T.S. 319,
entered into force, 25 December 2003 (166 States Parties as of Feb. 15, 2015).
69
Optional Protocol to the Convention on the Rights of the Child on the Sale of Children, Child Prostitution and
Child Pornography, 25 May 2000, entered into force, 18 Jan. 2002, 2171 U.N.T.S. 227.
70
International Convention for the Suppression of Financing of Terrorism, 9 Dec. 1999, entered into force, 10 April
2002, 2178 U.N.T.S. 197, art. 5.1. To similar effect are the Optional Protocol to the Convention on the Rights of the
Child on the Sale of Children, Child Prostitution and Child Pornography, May 25, 2000, entered into force, Jan. 18,
2002, 2171 U.N.T.S. 227, art. 3.4; Convention Against Transnational Organized Crime, Nov. 15, 2000, entered into
force, Sept. 29, 2003, 2225 U.N.T.S. 209, Art. 10; Convention Against Corruption, 31 Oct. 2003, entered into force,
14 Dec. 2005 , 2349 U.N.T.S. 41, art. 26; Organization for Economic Cooperation and Development, Convention on
Combating Bribery of Foreign Public Officials in International Business Transactions, Nov. 21, 1997,
DAFFE/IME/BR(97)20, entered into force, Feb. 15, 1999, art. 2.
71
Report of the Special Representative of the Secretary-General on the issue of human rights and transnational
corporations and other business enterprises, John Ruggie, Business and human rights: mapping international
standards of responsibility and accountability for corporate acts, UN Human Rights Council, UN Doc./HRC/4/35,
19 February 2007, ¶24-25; see also Anita Ramasastry and Robert C. Thompson, Commerce, Crime and Conflict:
Legal Remedies for Private Sector Liability for Grave Breaches of International Law: A Survey of Sixteen Countries
(Fafo 2006).
72
See section IV.A (5) below.
73
See section V.F below.
74
UN HRC Res. 26/9, 26 June 2014, par. 9.
11
The negotiation process could lead to an instrument ranging from a comparatively weak or minimalist
treaty, one that would simply mandate public reporting on human rights by large public companies (as recently
required in Europe by the European Union as part of its non-financial reporting rules),75 to a strong treaty that
provides for both civil and criminal remedies, in both national and international courts, for human rights violations
committed by corporations.
The global coalition of NGO’s calling for a treaty, as well as the lead governmental sponsor (Ecuador),
advocate a treaty that comes closer to the “hard” end of the spectrum. The November 2013 NGO Joint Statement
calls for a treaty that, among other things, requires States Parties to provide for:
“c) … legal liability for business enterprises for acts or omissions that infringe human rights;” [and]
“d) … access to an effective remedy by any State concerned, including access to justice for foreign victims
that suffered harm from acts or omissions of a business enterprise in situations where there are bases for the
States involved to exercise their territorial or extraterritorial protect- obligations.”76 (emphasis added)
In addition, the NGO’s call for a treaty that “[p]rovides for an international monitoring and accountability
mechanism.”77
Similarly, Ecuador’s Foreign Minister has written that the proposed treaty “would move the world to a legal
framework that holds transnational corporations accountable for their human rights violations. It will provide legal
protections and effective remedies, as well as create an important role for civil society actors in promoting corporate
accountability …”78
On the other hand, it is by no means clear that any treaty that ultimately emerges from a UN drafting
process will meet these objectives. In between the extremes of a strong treaty and no treaty, there is a wide range of
possible outcomes of a drafting process. There is also the possibility that there might be more than one treaty, or that
a treaty or treaties would address specific sectors.79
In this section we do not attempt to catalogue them all; there are simply too many options. Instead we
merely outline illustrative options, each modeled partly on existing global or regional instruments binding States in
regard to human rights or related fields, such as anti-corruption and environmental law.80 Each of these potential
templates is either widely ratified or recently adopted. Thus there is reason to believe that their form, at least, may
be generally acceptable to States.
In all these examples, references to “corporations” or “companies” refer to “transnational corporations and
other business enterprises,” the phrase used in all the Human Rights Council resolutions of the last decade relating to
business and human rights. Key conceptual issues that arise from the various treaty options, including from this
very phrase, are addressed in section V, following the catalogue of illustrative treaty options in this Part IV.
75
Council of the European Union, Press Release, New transparency rules on social responsibility for big companies,
Sept. 29, 2014. The new rules will apply only to large public-interest companies with more than 500 employees and
a balance sheet of $25.3 million and higher, or a net turnover of $50.7 million or more.
76
People’s Forum on Human Rights and Business, Bangkok, Nov.5-7, 2013, Joint Statement: Call for an
international legally binding instrument on human rights, transnational corporations and other business enterprises,
Par. 1 (c) and (d).
77
Id., par. 1 (e).
78
Ricardo Patiño, Transnational Misconduct Must End, HUFFINGTON POST, Oct. 24, 2014, accessible at
http://www.huffingtonpost.co.uk/ricardo-patino/ecuador-ricardo-patino_b_6040920.html
79
The Human Rights Council Resolution establishes the Intergovernmental Working Group on “a” legally binding
instrument, for the purpose of elaborating “an” international legally binding instrument. UN HRC Res. 26/9, 26 June
2014, Elaboration of an international legally binding instrument on transnational corporations and other business
enterprises with respect to human rights, par. 1. Hence it appears that further HRC authority might be needed for the
Working Group to elaborate more than one treaty.
80
For further analysis, see ICJ Report, note 30 above, pp. 34-43.
12
A treaty specifying business responsibilities could either be a new, freestanding instrument, or might be
crafted as an additional protocol to an existing treaty imposing human rights obligations on States.
For clarity, our listing is organized in two broad categories: treaties mandating mainly national action (Part
A below); and treaties establishing international enforcement machinery (Part B below). 81 (A treaty could of course
mandate both.) Within each category, the listing proceeds, roughly speaking, from relatively “weak” to relatively
“hard” treaty options.
A third category involves “policy coherence” treaties, by which States would review and amend their laws
and international agreements concerning business to ensure consistency with the State duty to protect human rights
(Part C below). A final category refers to treaties for particular business sectors or for certain kinds of human rights
violations (Part D below).
Finally, it should be noted that nothing in the UN treaty process precludes States or regional organizations
from proceeding with national or regional laws, treaties and other initiatives on business and human rights.
A. National Action Treaties:
1.
Business Reporting:
A treaty might simply require all or some corporations to report publicly on their human rights policies,
risks, outcomes and indicators, perhaps using the “comply or explain” approach of some recent reporting
regulations. For example, in October 2014 the European Union issued a Directive requiring some 6000 “public
interest” companies in the EU, having more than 500 employees and a balance sheet of $25.3 million and higher, or
a net turnover of $50.7 million or more annually, to disclose certain “non-financial and diversity information.”
Public interest companies are publicly listed companies of “significant public relevance” because of the nature of
their business, size or corporate status.82
Under these new rules, large public companies will have to report certain non-financial information: “as a
minimum, environmental, social and employee matters, respect for human rights, anti-corruption and bribery
matters.” Companies can avoid reporting on one or more of these issues if they do not pursue policies on those
issues and provide a “clear and reasoned” explanation of this choice.
In addition to a brief description of their business models, companies will generally be required to report
on:

Policies and Processes: their policies regarding human rights (and related matters), including their due
diligence processes;

Outcomes: the outcomes of their policies;

Risks: “the principal risks related to those matters linked to the group's operations including, where relevant
and proportionate, its business relationships, products or services which are likely to cause adverse impacts
in those areas, and how the group manages those risks;” and

Indicators: key human rights (and related) “performance indicators” relevant to the company’s business.83
The NGO Joint Statement on a treaty specifically calls on States to “monitor and regulate” business enterprises
and to provide for their “legal liability” and for an “effective remedy,” but only generally calls for an undefined
“international monitoring and accountability mechanism.” Joint Statement, note 42 above.
82
Council of the European Union, Press Release, New transparency rules on social responsibility for big companies,
Sept. 29, 2014.
83
Directive 2014/95 of the European Union Parliament and of the Council of 22 October 2014 amending Directive
2013/3/EU as regards disclosure of non-financial and diversity information by certain large undertakings and
81
13
EU member States will be allowed two years to incorporate the requirements of the Directive into their
domestic laws. The methods of enforcement of the EU reporting obligations and independent verification of
corporate reports are left to member State discretion. As is often true of EU directives, this may create
inconsistencies in the application of these rules, and possibly a lack of “teeth” if companies fail to comply.
One approach to a UN treaty would be to adopt this existing EU reporting requirement, or a similar one, for
States worldwide which choose to join the UN treaty, either as the entire UN treaty or as a component of a broader
UN treaty.
One advantage of such an approach is that the 28 EU member States, already bound by the reporting
requirement, and perhaps the current six EU candidate countries, might readily join a UN treaty obligating them to
do what they are already bound to do. This might encourage wider ratification of the treaty by other States. A
disadvantage, if the UN treaty were to go no further than a business-reporting requirement, is that it would not meet
the stated objectives of the principal proponents of a treaty, in terms of access to effective remedy and corporate
liability. It would still, however, facilitate a minimum baseline of information, providing potential transparency and
access to information.
2.
National Planning:
The UN Human Rights Council has encouraged all States to adopt National Action Plans to implement the
UN Guiding Principles on Human Rights.84 To date only a handful of States have done so, including the United
Kingdom, although another dozen or more are currently in the process of developing Plans,85 including the United
States.86 In addition, the UN Working Group on Business and Human Rights has published detailed guidance on
both the content of National Action Plans and the process by which they should be developed.87
In view of the limited number of States that have initiated planning processes to date, one form of treaty
might require all States Parties to do so, and encourage international cooperation in developing plans and sharing
best practices. The treaty might even require States to adopt, or at least encourage them to take into account, some
or all elements of the Working Group’s Guidance on plans. 88 The Working Group’s Guidance focuses on Pillar I
and the State Duty to Protect, and provides a non-exhaustive list of issues that States should evaluate and act on –
focusing on how States can use a smart mix of voluntary and regulatory measures to ensure that companies within
their jurisdiction respect human rights, and also that victims have better access to remedies. 89 This might constitute
either the entirety of a treaty, or one component of a broader treaty.
One advantage of such an approach would be to make clear that the treaty will reinforce, rather than detract
from, implementation of the UN Guiding Principles. A disadvantage is that, by itself, it would not meet the
objectives of the principal proponents of a treaty, since a focus on National Action Plans emphasizes national
activity without international oversight or enforcement, as well as the potential for divergent approaches to what
governments see as a common baseline for State action on business and human rights.
groups, par. 3, adding new article 29a, accessible at http://eur-lex.europa.eu/legalcontent/EN/TXT/?qid=1424037657022&uri=CELEX:32014L0095.
84
UN Human Rights Council, Res. 26/22, June 27, 2014, par. 2.
85
See listing at http://www.ohchr.org/EN/Issues/Business/Pages/NationalActionPlans.aspx.
86
See US Dept. of State, USG National Action Plan on Responsible Business Conduct: Frequently Asked
Questions, Feb. 12, 2015, accessible at http://www.humanrights.gov/dyn/2015/usg-national-action-plan-onresponsible-business-conduct/.
87
UN Working Group on Business and Human Rights, Guidance on National Action Plans on Business and Human
Rights, Version 1.01, December 2014, accessible at
http://www.ohchr.org/Documents/Issues/Business/UNWG_%20NAPGuidance.pdf.
88
Id. at 17-36.
89
Id. at 17-36.
14
3.
Business Implementation of Guiding Principles:
A treaty might mandate:

States to carry out their duties under the UN Guiding Principles to “protect” human rights from
violations by business or in which business is involved (“Pillar One” of the Guiding Principles),
including with respect to extraterritorial operations of their businesses, to the extent jurisdictional bases
exist under international law;90

States to require all businesses, or all businesses above a certain size, to carry out their responsibility to
“respect” human rights through adoption of human rights policies, due diligence processes, human
rights conditions in their supply chain contracts, and remediation mechanisms (“Pillars One and Two”
of the Guiding Principles); and

States and business to address their judicial and non-judicial remediation responsibilities (“Pillar
Three” of the Guiding Principles), either through taking certain specified measures, or through review
processes designed to assure that victims have access to effective remedies.
An advantage of this approach is that it would encourage effective implementation of the UN Guiding
Principles, whose basic content is already widely approved (albeit in “soft law” form). This approach is related to
the National Action Plan option outlined above, but goes further in specifying the concrete actions that States must
take to fulfill their treaty obligations. Implementation might be facilitated by templates for business reporting on
implementation of the Guiding Principles, such as the UN Guiding Principles Reporting Framework recently
developed by Shift and Mazars for the Human Rights Reporting and Assurance Frameworks Initiative (RAFI). 91
Some of the same challenges exist, however, as with the prior National Action Plan option. A difficulty is
that much of the language of the Guiding Principles, and of their accompanying commentary, is purposefully vague
and flexible. On some points, then, the treaty language would need either to be made more precise, thereby
triggering more extended negotiations and perhaps ultimate rejection, or to be “soft,” requiring States and business,
for example, to “take into account” certain of their obligations and responsibilities, or to demonstrate that they have
given them “due consideration,” even while other obligations (especially State obligations under existing human
rights treaties) might be clearly stated and mandated.
One possible approach for such a treaty would be for States Parties to adopt mandatory “due diligence”
requirements for their companies in regard to their global supply chains, similar to the bill recently approved by the
French National Assembly,92 and as encouraged by a recent resolution of the European Parliament. 93 The French
bill, which many observers expect to be enacted into law in 2015, would make “French companies employing 5,000
employees or more domestically or 10,000 employees or more internationally … responsible for developing and
publishing due diligence plans for human rights, and environmental and social risks. Failure to do so could result in
fines of up to 10 million euros.” 94
See section V.D below. The Commentary to Principle 2 of the UN Guiding Principles states: “At present States
are not generally required under international human rights law to regulate the extraterritorial activities of businesses
domiciled in their territory and/or jurisdiction. Nor are they generally prohibited from doing so, provided there is a
recognized jurisdictional basis.”
91
Accessible at http://www.shiftproject.org/project/human-rights-reporting-and-assurance-frameworks-initiativerafi.
92
National Assembly of France, Proposed Law, adopted text no. 501, 30 March 2015, accessible at
http://www.assemblee-nationale.fr/14/ta/ta0501.asp.
93
European Parliament resolution on the second anniversary of the Rana Plaza building collapse and progress of the
Bangladesh Sustainability Compact (2015/2589(RSP)) 28 April 2015, accessible at
http://www.europarl.europa.eu/sides/getDoc.do?type=MOTION&reference=P8-RC-2015-0363&language=EN.
94
Roel Nieuwenkamp, Legislation on responsible business conduct must reinforce the wheel, not reinvent it, 15
April 2015, accessible at http://oecdinsights.org/2015/04/15/legislation-on-responsible-business-conduct-mustreinforce-the-wheel-not-reinvent-it/. Mr. Nieuwenkamp is Chair of the OED Working Party on Responsible
90
15
In a resolution adopted shortly after the French bill, the European Parliament “consider[ed] that new EU
legislation is necessary to create a legal obligation of due diligence for EU companies outsourcing production to
third countries, including measures to secure traceability and transparency, in line with the UN Guiding Principles
on Business and Human Rights and the OECD MNE Guidelines.”95 Although this Resolution does not by itself
mandate EU due diligence legislation, it may well lead to such legislation because the OECD Guidelines on
Multinational Enterprises, discussed below, include a component on human rights due diligence.96
In Switzerland, a bill to mandate due diligence was narrowly defeated in Parliament, but an effort to
mandate a binding public referendum is now underway. 97
If a treaty were to commit States Parties to require human rights due diligence for businesses, or even
compliance with all three pillars of the Guiding Principles more generally, consideration might also be given to
whether good faith, demonstrated compliance with the Guiding Principles (or due diligence) might be deemed a
defense to, or at least a proportional mitigation of, criminal or civil liability. Such a provision could give business a
strong incentive to comply with the Guiding Principles or to exercise due diligence, without depriving victims of a
remedy for serious violations of human rights.
The US Federal Sentencing Guidelines provide a relevant example in the area of anti-corruption. Courts
and the US Department of Justice take certain factors into consideration when assessing criminal fines for
companies prosecuted under the U.S. Foreign Corrupt Practices Act:98





whether high-level personnel were involved in or condoned the conduct,
whether the organization had a pre-existing compliance and ethics program,
voluntary disclosure,
cooperation, and
acceptance of responsibility.
United Kingdom anti-bribery law provides an example of due diligence as defense. The fact that
companies took “adequate procedures” to prevent bribery in their operations is a defense to a charge of a company’s
failure to prevent bribery under the UK Bribery Act of 2010. 99
Like the reporting and planning approaches outlined above, this approach to a treaty has the disadvantage
that it does not meet all the objectives of the principal proponents of a treaty. 100 However, if suitable treaty language
Business Conduct. (The quoted language in text above is from his commentary, not from the original French text of
the bill.)
95
European Parliament Resolution, note 93 above, par. 23.
96
Arnaud Poitevin, The EU may move towards mandatory business & human rights regulation, May 9, 2015,
accessible at http://business-humanrights.org/en/eu-parliamentary-motion-calls-for-mandatory-human-rights-duediligence-for-companies?utm_source=Business+%26+human+rights++Weekly+Update&utm_campaign=f16079aed2Weekly_Update_13_May_20155_12_2015&utm_medium=email&utm_term=0_3a0b8cd0d0-f16079aed2174128041.
97
The Swiss motion, proposing mandatory human rights and environmental due diligence for Swiss corporations,
was defeated by a vote of 95-86. Nieuwenkamp, note 94 above. In response, the Swiss Coalition for Corporate
Justice has begun collecting signatures for a popular initiative on the same topic. If they gather 100,000 signatures in
18 months, the measure will be put to a binding public referendum. http://www.corporatejustice.ch/en/.
98
US Sentencing Commission, US Sentencing Guidelines Chapter 8, Part B, e Remedying Harm from Criminal
Conduct, and Effective Compliance and Ethics Program (1991).
99
See Transparency International UK Adequate Procedures Guidance http://www.transparency.org.uk/ourwork/business-integrity/bribery-act/adequate-procedures.
100
But it may meet some objectives of some proponents. The Secretary General of Amnesty International recently
wrote, “A treaty should require each state to pass laws to make corporate human rights due diligence mandatory, …”
16
could be found, it might be acceptable to a broad range of States as a stand-alone treaty. Alternatively, it could be
one component of a broader treaty.
4.
Framework Treaty:
One way to implement the UN Guiding Principles (or other basic principles on business and human rights)
could be a treaty designed to set in motion an ongoing process of review and elaboration of additional standards over
time. That could be the result of initially adopting a generally worded, “framework” treaty, committing States
Parties only to broad principles, later to be supplemented by more specified duties, through additional protocols or
actions, based on review of state practice over time.
An example of such an approach is the universally ratified international legal regime on the ozone layer in
the atmosphere.101 The regime began with the 1985 Vienna Convention for the Protection of the Ozone Layer. 102
The initial commitments of States Parties were extremely general and flexible: “to take appropriate measures in
accordance with the provisions of this Convention and of those protocols in force to which they are party,” and to
“[c]o-operate in the formulation of agreed measures, procedures and standards for the implementation of this
Convention, with a view to the adoption of protocols and annexes …” 103
As scientific analysis of ozone depletion progressed, the States Parties agreed to adopt more specific
measures in the 1987 Montreal Protocol on Substances that Deplete the Ozone Layer. 104 In addition, States included
in the Montreal Protocol a “unique adjustment provision”: Parties agreed to respond swiftly to new scientific
information and to accelerate reductions of chemicals covered by the Convention as needed, by means of
adjustments that would be “automatically applicable to all countries that ratified the Protocol.” Since its initial
adoption, the Montreal Protocol has thus been modified six times, without the need to adopt a new treaty or protocol
on each occasion.105
The main advantage of initially adopting a “framework” treaty like the Vienna Convention for business and
human rights is that it might swiftly secure broad agreement by States. Its general principles could be taken from
the already widely supported UN Guiding Principles. More difficult or specific issues could then be deferred to
future protocols, without holding up the entire negotiating process (possibly for years), or limiting the number of
Parties to an eventual treaty to only the most supportive States. The European Convention on Human Rights, for
example, has been supplemented with 15 additional protocols (plus two more that are pending ratifications), giving
rise to new State obligations as consensus emerged on different human rights. 106
Future protocols to a framework business and human rights treaty might provide for supplemental
commitments which States will then be asked to ratify. The treaty might even provide for automatic adjustments,
based on review of experience in implementing the framework principles, whenever agreement is reached by States
Parties, as in the Montreal Protocol. (However, automatic adjustments of business responsibilities might not be as
easily crafted or agreed as additional restrictions on chemicals affecting the ozone layer.)
The main disadvantage of such a “framework” approach is that it would not initially be likely to achieve
what treaty proponents principally seek: legally enforceable corporate accountability, and access of victims to
effective remedies. Proponents might well doubt whether, after adoption of a framework convention, any future
Salil Shetty, Corporations have rights. Now we need a global treaty on their responsibilities, GUARDIAN (UK), 22
January 2015.
101
Both the Vienna Convention and the Montreal Protocol enjoy universal ratification (by 197 States Parties). See
table at http://ozone.unep.org/new_site/en/treaty_ratification_status.php.
102
Adopted 22 March 1985, entered into force, 22 Sept. 1988, 1513 U.N.T.S. 293.
103
Vienna Convention, arts. 1 and 2.c.
104
Adopted 16 Sept. 1987, entered into force, 1 Jan. 1989, 1522 U.N.T.S. 3.
105
The foregoing information and quoted language are taken from the web site of the UN Environment Programme,
Ozone Secretariat, http://ozone.unep.org/new_site/en/montreal_protocol.php (as of May 19, 2015).
106
See table at http://conventions.coe.int/Treaty/Commun/ListeTraites.asp?CM=8&CL=ENG
17
protocols or adjustments would likely be adopted. On the other hand, early agreement on a framework treaty might
create positive momentum that could ease the way for further negotiations on more challenging issues.
5.
National Criminalization and International Cooperation:
A treaty might specify certain internationally recognized crimes against human rights, and require States to
prosecute corporations and corporate executives and to cooperate with each other in doing so.
The form of such a treaty could be modeled on the OECD Convention on Combating Bribery of Foreign
Public Officials in International Business Transactions, 107 which has been joined by all 34 OECD member States
(including the US and the UK), as well as seven other States.108 The Convention requires States to criminalize
bribery of foreign public officials, as well as complicity in such bribery.109 Where State legal systems do not permit
criminal prosecutions of legal persons such as corporations, the Convention requires States Parties to “ensure that
legal persons shall be subject to effective, proportionate and dissuasive non-criminal sanctions, including monetary
sanctions, for bribery of foreign public officials.” 110
International cooperation in enforcement is required through mutual legal assistance, extradition, and
cooperation on monitoring through the OECD Working Group on Bribery in International Business Transactions
(“the OECD Working Group”), composed of experts of States Parties to the Convention.111
The OECD uses two tools -- monitoring and peer pressure – to ensure implementation and enforcement of
the Convention. The OECD Working Group examines and evaluates through a rigorous monitoring mechanism a
Party’s efforts to live up to its anti-bribery obligations. After the initial assessment of a State’s legislation for
conformity with the Convention, the second phase of the monitoring process examines the structures in place to
enforce the laws.112
The systematic examination and assessment of a State’s performance by peers result in recommendations
for concrete anti-bribery actions by the examined country. In addition, the Working Group, at its regular meetings,
conducts a “tour de table” exercise as a unique mechanism to report about latest developments, both in legislation
and in enforcement actions and to hold States responsible for reporting on their actions to their peers.113
A treaty on business and human rights could similarly require States to criminalize and cooperate in
prosecuting corporations and corporate executives who commit or are complicit in such crimes against human rights
as genocide, crimes against humanity, war crimes, torture, forced labor, and other defined international crimes 114
(human trafficking is already the subject of a similar convention). 115
An advantage of this approach is that, in the corruption context, its form has already been accepted, not
only by OECD States, but also by most States through the UN Convention against Corruption (see below). Nor, in a
sense, would the substance be new: many international crimes against human rights are already defined by
international law and widely recognized as such by States. In those two senses, there would be “nothing new”
107
Signed 17 Sept. 1997, entered into force, 15 February 1999.
See http://www.oecd.org/corruption/oecdantibriberyconvention.htm.
109
Convention, arts. 1.1 and 1.2.
110
Convention, art. 3.2.
111
Convention, arts. 9, 10 and 12.
112
http://www.oecd.org/daf/anti-bribery/countrymonitoringoftheoecdanti-briberyconvention.htm
113
OECD, “OECD Fights Foreign Bribery”.
114
John Ruggie recently suggested that “one obvious focus” for a treaty “would be the worst of the worst: business
involvement in gross human rights abuses, such as genocide, extrajudicial killings, and slavery, as well as forced and
bonded labor.” J. Ruggie, Quo Vadis? Unsolicited Advice to Business and Human Rights Treaty Sponsors, Institute
for Human Rights and Business, Sept. 9, 2014, note 17, accessible at http://www.ihrb.org/commentary/quo-vadisunsolicited-advice-business.html.
115
Protocol to Prevent, Suppress and Punish Trafficking in Persons, Especially Women and Children,
supplementing the United Nations Convention against Transnational Organized Crime, 15 November 2000, 2237
U.N.T.S. 319, entered into force, 25 December 2003 (166 States Parties as of Feb. 15, 2015).
108
18
conceptually about such a treaty – even though, in practice, domestic criminalization by States of international
human rights crimes is currently uneven, while criminal punishment of business involvement in such crimes is rare,
as is the imposition of proportional civil sanctions against corporations.116
There are also disadvantages to the OECD model as a stand-alone approach. It would focus on negative
sanctions as deterrents, rather than on more positive and broader forms of preventing human rights abuses. It would
also be limited to serious human rights crimes (referred to by some as “gross” human rights abuses), rather than to
the far broader range of human rights violations that are often important in the business context (e.g., routine labor
rights violations such as wage theft or unpaid overtime, or failures by States to engage in processes to secure the
free, prior, informed consent of indigenous communities about business projects affecting their lands). 117
On the other hand, a treaty whose form is patterned on the OECD Convention need not be a stand-alone
approach. It could be incorporated in a broader treaty. Indeed, in the corruption context, it already has been, as
noted in the next section.
6.
National Prevention, Sanctions and International Cooperation:
The UN Convention against Corruption (“UNCAC”), adopted in 2003 and entered into force in 2005, now
has 175 States Parties (including the US and the UK).118 It not only incorporates the OECD approach described in
the previous section, it also has extensive provisions requiring States to seek to prevent corruption through policies,
practices, periodic review, establishment of independent prevention bodies, reporting and international
collaboration.119
The form of UNCAC has thus met nearly universal acceptance by States. More than the text of the OECD
Convention, the UN Convention takes both a preventive and a punitive approach. UNCAC requires the
criminalization of foreign bribery.120 Like the OECD Convention, it covers complicity as well as direct commission
of crimes,121 and requires States to “establish the liability” of corporations for offenses under the Convention,
whether that be criminal or, in States whose legal systems do not permit criminal prosecution of legal persons, then
“effective, proportionate and dissuasive” civil or administrative sanctions.122 UNCAC also requires States to provide
victims of corruption access to civil damages. 123
UNCAC calls for peer review and also for monitoring of treaty implementation by an Assembly of States
Parties.124 These are not as robust, however, as in the OECD Convention. The OECD Convention serves as a good
example of the possible benefits of civil society participation, as reports and recommendations are made public, and
private sector and civil society play an active role throughout each review phase of the convention’s monitoring
116
See Anita Ramasastry and Robert C. Thompson, Commerce, Crime and Conflict: Legal Remedies for Private
Sector Liability for Grave Breaches of International Law: A Survey of Sixteen Countries (Fafo 2006) (uneven
domestic incorporation); Int’l Corporate Accountability Roundtable, Commerce, Crime, and Human Rights: Closing
the Prosecution Gaps, (businesses “rarely” held to account) accessible at http://icar.ngo/wpcontent/uploads/2014/06/CCHR_Concept-Note-Commerce-Crime-and-Human-Rights.pdf
117
E.g., United Nations Declaration on the Rights of Indigenous Peoples (2007), arts. 19, 29.2 and 32.2;
International Labour Oganisation Convention No. 169, Indigenous and Tribal Peoples Convention, 27 June 1989,
entered into force, 5 Sept. 1991, arts. 6, 7.1, 15.2, 16.2, 17.2, 25.2, 27.1, 27.2, and 28.1.
118
Adopted 31 Oct. 2003, 2349 U.N.T.S. 41, entered into force, 14 Dec. 2005. See ratification table at
http://www.unodc.org/unodc/en/treaties/CAC/signatories.html.
119
Convention, arts. 5, 6, 10, 12 and 14.
120
Convention, art. 16.
121
Convention, art. 27.1.
122
Convention, art. 26.
123
Article 35 states: “Each State Party shall take such measures as may be necessary, in accordance with principles
of its domestic law, to ensure that entities or persons who have suffered damage as a result of an act of corruption
have the right to initiate legal proceedings against those responsible for that damage in order to obtain
compensation.”
124
Convention, art. 63.
19
mechanism.125 UNCAC provides for periodic review, but allows States Parties to choose whether to disclose the
findings of any evaluation as well as their own self-assessment.126 An optional clause permits disputes between
States over implementation of the UN Convention to be referred to the International Court of Justice. 127
Given the broad acceptance of the UNCAC, one might anticipate broad acceptance of its form as a model
for a treaty on business and human rights. Preventive aspects of such a treaty might incorporate reporting
requirements and references to the UN Guiding Principles (as discussed above). Controversy might arise over
which international crimes against human rights should be included in the treaty. Because this form of treaty relies
heavily on State implementation – where the political will or capacity to regulate business interests is often lacking –
proponents of a treaty on business and human rights might object to the lack of binding international enforcement
institutions and procedures.
7.
National Civil Remedies:
In addition to national criminal enforcement as discussed in the preceding two sections, a treaty could
require States to provide civil damages remedies for victims of human rights violations committed by business or in
which business is complicit. National civil damages remedies are mandated, not only by UNCAC (as noted in the
preceding section), but also, for example, by the UN Convention against Torture,128 a treaty joined by 158 States
Parties (including the US and the UK).129 The Convention provides:
“Each State Party shall ensure in its legal system that the victim of an act of torture obtains redress and has
an enforceable right to fair and adequate compensation, including the means for as full rehabilitation as
possible. …” (Art. 14.1.)
There would be important advantages in requiring a national civil damages remedy in a treaty. In principle,
mandating national judicial (or non-judicial) damages remedies would be consistent with State obligations under
Pillar Three of the Guiding Principles, while responding to demands of the main treaty proponents for remedies and
accountability.
A bare mandate of civil remedies, however, is no guarantee that they will be effective. Experience has
shown that theoretical access to justice (civil or criminal) is often thwarted in practice by legal barriers such as
corporate veils and separate legal personality for parents and subsidiaries, limits on jurisdiction, and statutes of
limitations, as well as practical barriers such as the high costs of litigation, the lack of legal aid or litigation funding
for victims, and intimidation (or worse) of victims and witnesses. 130 Some (but only some) of these issues are
explored in section V below. If a treaty mandating national civil damages remedies is to be effective in practice,
some way to address many of these thorny issues will have to be considered, either by addressing them in the treaty
text, or by creating some institution or process to address them in future implementation of the treaty.
125
See Marie Chêne and Gillian Dell, U4 Expert Answer: Comparative Assessment of AntiCorruption
Conventions’ Review Mechanisms, 2 (2008), available at http://www.u4.no/helpdesk/helpdesk/query.cfm?id=163.
126
Most governments have not made public their self-assessments, which provide the basis for the review, nor have
most governments agreed to publish the full review report online. Only the executive summary must be published.
UNCAC Article 13.
127
Convention, art. 66.
128
Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, 10 Dec. 1984,
entered into force, 26 June 1987, 1465 U.N.T.S. 85.
129
See table at https://treaties.un.org/pages/ViewDetails.aspx?src=TREATY&mtdsg_no=IV9&chapter=4&lang=en.
130
See generally, e.g., Jennifer Zerk, Corporate Liability for Gross Human Rights Abuses: Towards a Fairer and
More Effective System of Domestic Law Remedies (2014) accessible at
http://www.ohchr.org/Documents/Issues/Business/DomesticLawRemedies/StudyDomesticeLawRemedies.pdf; G.
Skinner, R. McCorquodale and O. De Schutter, The Third Pillar: Access to Judicial Remedies for Human Rights
Violations by Transnational Business (2013).
20
8.
Comprehensive National Protection:
As set forth in section III above, general human rights treaties impose wide-ranging duties on States to
protect persons subject to their jurisdiction from human rights violations, including violations committed by third
parties. A treaty on business and human rights could make explicit what is already implicit: that States must carry
out those wide-ranging obligations specifically to protect people from human rights violations in which business is
involved.
An advantage of this approach would be breadth of coverage. A disadvantage, however, is the vagueness
and ambiguity of the language of general State obligations to “ensure” respect for human rights. There is an
argument, then, for coupling any such broad language with more specific State or business obligations, ranging from
reporting and planning to civil and criminal liability, as outlined in the preceding sections.
B. International Supervision Treaties:
1.
State Reports to an International Body:
Twelve UN human rights treaties, several of which are widely ratified, as well as many ILO labor treaties,
require States periodically to report on the progress they have made and obstacles they encounter in implementing
their treaty obligations.131 States submit written reports to committees consisting of experts, elected in their
individual capacities by States Parties, to oversee treaty implementation. Civil society submits “shadow reports”
and otherwise engages in the review process. The expert committees then conduct “constructive dialogue” with
States in public hearings, after which they issue “concluding observations” expressing concerns and making
recommendations.
The reporting process has been plagued by multiple, overlapping and burdensome State reporting
obligations; State delays or failures to report; and, even so, delays and overwhelming burdens on UN treaty
committees in reviewing reports.132 On the other hand, the reporting process provides an opportunity for periodic
self-assessment by States, with participation by civil society in a relatively transparent process, and accountability in
the form of publicized critiques and recommendations by expert, collectively independent bodies.
On balance, State reporting might be deemed a useful component of a treaty on business and human rights.
It could be combined with some requirement that States create and then implement National Action Plans as
outlined in section IV.A.2 above. Reporting could relate to a State’s own progress with respect to its plans, for
example. Any reporting commitment would likely need to be harmonized with other UN treaty reporting
procedures.133
E.g., ICPR, art. 40.1 (States Parties “undertake to submit reports on the measures they have adopted which give
effect to the rights recognized herein and on the progress made in the enjoyment of those rights”).
132
See generally, Navanethem Pillay, United Nations human rights treaty body system: A Report by the United
Nations High Commissioner for Human Rights, June 2012, accessible at
http://www.ohchr.org/EN/HRBodies/HRTD/Pages/TBStrengthening.aspx.
133
See generally, e.g., UN G.A. Res. 68/268, Strengthening and enhancing the effective functioning of the human
rights treaty body system, UN Doc. A/RES/68/268, 21 April 2014.
131
21
2.
Individual Complaints to an International Treaty Body:
Optional clauses or protocols to at least eight core UN human rights treaties allow individuals to file
complaints with the expert treaty bodies against States which agree to accept the procedure, once the complainants
have exhausted domestic remedies or show good cause for failing to do so.134 The number of States agreeing to
individual complaint procedures, while often significant, is generally far fewer than the number of States Parties to
the treaty. For example, whereas the International Covenant on Civil and Political Rights has 168 States Parties,135
its First Optional Protocol, establishing its individual complaint procedure, has only 115 States Parties. 136
The complaints are generally processed with little transparency, without independent investigations by the
committees, and without public or evidentiary hearings. They result in “observations” from the treaty bodies which
many States regard as not legally binding, and which often yield no or only partial compliance.
Nonetheless human rights NGOs have waged campaigns to establish individual complaint procedures for
treaties that did not originally allow them. The written complaint procedure may be far less expensive than fullblown judicial litigation; it may result in published committee findings that place pressure on States to provide relief
to the victim and not infrequently lead to a constructive response; it may develop jurisprudence; and it may be used
to bring illustrative cases exemplifying broader patterns of abuse by States.
In negotiating situations where large numbers of States are willing to accept normative and reporting
obligations, but only smaller numbers are willing to accept individual complaint procedures, the optional mechanism
allows a way to maximize the number of States Parties to the main treaty, while also creating an individual
complaints procedure for those States willing (now or in the future) to accept them.
Especially if States are resistant to a treaty requiring some form of complaints procedure resulting in legally
binding rulings, as in adjudication, arbitration or administrative decision, a non-binding mechanism may be better
than no individual complaint mechanism at all. It may also provide a way to overcome the barriers of expense and
inequality of arms that may make adjudication or arbitration difficult for victims to pursue in practice.
A threshold question is whether such a procedure would allow individual complaints to be filed against
States, companies, or both. The answer might depend on the nature of the underlying substantive obligations
imposed by the treaty, and on whether they mandate conduct by States, companies, or both. 137
OECD member States have already agreed to one form of complaint procedure, established as part of the
OECD Guidelines for Multinational Enterprises.138 The OECD Guidelines are recommendations from governments
to multinational enterprises operating in or from countries that are signatory to the Declaration on International
Investment and Multinational Enterprises including the Guidelines. The OECD Guidelines provide guidance for
responsible business conduct in areas such as: labor rights, human rights, environment, combating bribery,
consumer protection competition, taxation, and intellectual property rights.
While the Guidelines are not legally binding on companies, OECD and signatory governments are required
to ensure that they are implemented and observed. What distinguishes the OECD Guidelines from some other
corporate responsibility instruments and mechanisms is their transnational nature, the fact that they are governmentbacked standards and that they have a dispute resolution mechanism for resolving conflicts regarding alleged
corporate misconduct.
134
See generally http://www.ohchr.org/EN/HRBodies/TBPetitions/Pages/HRTBPetitions.aspx.
See table at https://treaties.un.org/Pages/ViewDetails.aspx?src=TREATY&id=IV~4&chapter=4&lang=en.
136
See table at https://treaties.un.org/Pages/ViewDetails.aspx?src=TREATY&mtdsg_no=IV5&chapter=4&lang=en.
137
In the context of individual complaints against States, human rights treaty bodies already address many human
rights violations involving business. See ESCR-Net, Global Economy, Global Rights: A Practitioner’s Guide for
Interpreting Human Rights Obligations in the Global Economy (2014). However, any resulting remedies are
formally only against States, which may or may not implement them with regard to any businesses involved.
138
The Guidelines are accessible at http://mneguidelines.oecd.org/text/.
135
22
Governments that adhere to the Guidelines must establish a National Contact Point (“NCP”) to handle
complaints against companies that have allegedly failed to adhere to Guidelines’ standards. 139 The ‘specific
instance’ procedure – as the Guidelines’ complaint process is officially called – is meant to resolve disputes,
primarily through mediation and conciliation, but also through other means. The dispute resolution procedure can
be used by anyone who can demonstrate an “interest” (broadly defined) in the alleged violation.
Non-governmental organizations and trade unions from around the world have used the specific instance
process to address adverse human rights impacts caused by alleged corporate misconduct. The OECD NCP system
is one model of dispute resolution that could be expanded or used as a model for further consideration. It should be
noted, however, that the effectiveness of NCP procedures varies among countries, and that some civil society actors
have been sharply critical of NCP procedures as uneven and often ineffective.140
3.
International Civil Adjudication.
There are no UN or other global courts where victims of human rights violations can sue States for
declaratory judgments and reparations. However, at the regional level, there are at least three such institutions: the
European Court of Human Rights, which can issue legally binding judgments in human rights cases against all fortyseven member States of the Council of Europe;141 the Inter-American Court of Human Rights, which can issue
legally binding judgments against the twenty OAS member States that accept its contentious jurisdiction;142 and the
African Court of Human and Peoples’ Rights, which can issue legally binding judgments against the twenty-seven
African States Parties to the Protocol establishing the Court. 143 (Human rights complaints can also be brought
against States before some courts at the sub-regional level.)144
The jurisdiction of such international courts is generally considered subsidiary to that of national courts;
cases may not be brought before the international courts until after remedies before national courts are exhausted or
good reason is shown for not doing so. 145 The remedies they afford may vary. The Inter-American Court provides
the widest range of reparations, including restitution where feasible; money damages for material and moral injuries;
rehabilitation; satisfaction, including symbolic reparations such as naming of memorials and public apologies by
high State officials; and guarantees of non-repetition, such as new laws and training programs for State officials and
security forces.146
To the extent States fail to carry out their duty to protect people from business, they may already be sued
before regional human rights courts. However, not all States are parties to regional or sub-regional courts with
competence to hear human rights cases. An international court on business and human rights might not only fill that
gap, but could also permit suits against companies.
139
The NCP procedures are accessible at http://mneguidelines.oecd.org/ncps/.
E.g., OECD Watch, Assessment of NCP Performance in the 2013-2014 Implementation Cycle, June 2014,
accessible at http://oecdwatch.org/publications-en/Publication_3962.
141
See Table at http://conventions.coe.int/Treaty/Commun/ListeTableauCourt.asp?MA=3&CM=16&CL=ENG, for
Council of Europe treaty CETS No. 5.
142
Int.Am.Ct.H.Rts., ANNUAL REPORT 2013, p. 5, accessible at
http://www.corteidh.or.cr/sitios/informes/docs/ENG/eng_2013.pdf.
143
See Table at http://www.au.int/en/sites/default/files/achpr_1.pdf.
144
E.g., Court of Justice of the European Union; see generally http://europa.eu/about-eu/institutions-bodies/courtjustice/index_en.htm; Community Court of Justice of the Economic Community of West African States (see note
145 below).
145
The ECOWAS Community Court of Justice is an exception. Exhaustion of domestic remedies is not required
before filing cases in that Court. Koraou v. Niger, Judgment ECW/CCJ/APP/0808, 27 Oct. 2008, pars. 36-53.
146
See generally D. Cassel, The Expanding Scope and Impact of Reparations Awarded by the Inter-American Court
of Human Rights, in OUT OF THE ASHES: REPARATIONS FOR GROSS VIOLATIONS OF HUMAN RIGHTS, K. De Feyter,
S. Parmentier, M. Bossuyt and P. Lemmens eds. (Intersentia 2005), pp. 191-223.
140
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Where justice in the form of civil remedies is not available before the relevant national courts – which
might be the courts of either the home State or the host State in the case of transnational corporations – an
international court on business and human rights could thus, in theory, ensure the legal liability and access to civil
justice which are among the demands of the civil society Joint Statement. 147 On the other hand, a significant number
of States, including major home States of transnational corporations such as the US, UK and China, are likely to
resist a treaty exposing their companies to suit for money damages in an international court, even if a treaty included
procedural safeguards which would likely be prerequisites to creation of such a court.
Predominantly host countries of transnational investment might well agree to join a treaty creating such an
international tribunal, and could confer jurisdiction on the tribunal, at least with respect to subsidiaries or other
activities of transnational corporations operating in their territories. Whether they could confer jurisdiction on the
parent companies of such subsidiaries, however, is a separate question.
A bevy of practical questions would be important for accessibility and efficacy of such an international
tribunal. For example: What resources would it have? How would it be funded? How many cases could it hear?
Could claims be aggregated? What remedies could it order? How would victims’ litigation costs – let alone a
semblance of equality of arms with wealthy corporate defendants – be assured?
The answers will not come easily. Yet if such issues are not tackled (whether in a treaty or in the statute or
rules of the court), and victims seeking civil damages are left to the vagaries of national courts, justice may remain
elusive. And even if workable answers are found, they still might not reach companies domiciled in States which
decline to join the treaty.
4.
International Mediation and Arbitration:
Thousands of bilateral and multilateral investment and trade treaties currently allow foreign corporations to
sue host States, before international arbitral tribunals, for alleged breaches of stabilization clauses, regulatory
takings, denials of justice, and other claims arising from State efforts to protect public health, the environment and
worker rights in their territories.148 Those same treaties do not, however, allow victims of any resulting human
rights, consumer, worker or environmental violations to sue or countersue the foreign corporations before the
arbitral tribunals for endangering their lives, health or livelihoods.
Recently a team of practitioners and scholars has circulated several drafts of a proposal to, in effect, redress
this imbalance, by permitting victims of human rights violations in which companies are involved to bring the
companies before an international arbitral tribunal on business and human rights. 149 Binding arbitration might be
preceded by voluntary mediation. The arbitral tribunal might be created, and its use mandated or encouraged, by
one or more of a variety of means, including voluntary agreements, incorporation into the Permanent Court of
Arbitration,150 conditions in supply chain contracts or in bank loans, and regulatory requirements.
One means of establishing or utilizing the tribunal would be to provide for or recognize it in a treaty on
business and human rights. A treaty might, for example, mandate States Parties to require businesses in certain
circumstances to accept its jurisdiction. As opposed to lawsuits for damages before an international court, an arbitral
proceeding might have the advantage of speedier and more streamlined procedures, and potential enforceability of
its arbitral awards before the courts of nearly all nations under the New York Arbitration Convention. 151 If no
147
See note 42 above.
See generally Public Citizen, Case Studies: Investor-State Attacks on Public Interest Policies (2014), accessible
at http://www.citizen.org/documents/egregious-investor-state-attacks-case-studies.pdf.
149
Claes Cronstedt and Robert Thompson et al., An International Arbitration Tribunal on Business and Human
Rights, Version 5, April 13, 2015, accessible at http://www.l4bb.org/news/TribunalV5B.pdf. One of the authors of
this White Paper has been a commentator on the drafts. Id., Appendix A at 21.
150
See generally http://www.pca-cpa.org/showpage.asp?pag_id=363.
151
Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 10 June 1958, entered into force, 7
June 1959, 330 U.N.T.S. 3. Some 152 States are parties to the Convention, including all major commercial States.
See list at http://www.newyorkconvention.org/contracting-states/list-of-contracting-states, and update at
http://www.newyorkconvention.org/.
148
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international court is agreed to in a treaty, an arbitral tribunal, unlike individual complaint procedures before a treaty
body, would have the advantage of being empowered to issue a legally binding award with potentially broad
enforceability throughout the world. To the extent national justice systems remain beset by barriers to access and to
fair adjudication, an arbitral tribunal might provide a workable alternative.
Many issues remain. For example: How would the tribunal be funded? How would victims’ litigation
costs be funded? In view of the controversial track record of investor-State arbitration in matters affecting human
rights, would victims and their advocates be willing to use even a tribunal where they would have standing? How
would arbitrators be found with the necessary expertise, credibility and objectivity in matters of business and human
rights, particularly with respect to the specific concerns of communities and populations affected by corporate
conduct? How public would be the arbitral proceedings and awards? 152
Arbitration, as with transnational civil litigation, can also be lengthy and protracted. In some jurisdictions,
citizens or claimants are never allowed to waive or relinquish their right to court in any type of contract signed
before a dispute arises. Even if claimants may have a choice at the outset, a question remains of whether a consent
to arbitrate will lead to a complete ban on future litigation.
The larger question is whether the model of investor-style international arbitration will be suitable to meet
the needs of individual claimants or communities who seek redress for ongoing harms and need swift injunctive
relief as opposed to damages and findings.
These and other questions are being addressed by the authors of the draft proposal through consultations
with diverse stakeholders. While many of these questions might better be addressed in the rules of an arbitral
tribunal, a drafting process for a treaty on business and human rights might take them into account.
5.
International Criminal Prosecution:
Corporate executives have been prosecuted by international courts since Nuremberg. 153 For example, two
executives of the German company that sold gas to the Nazi gas chambers were prosecuted by a British military
occupation tribunal, convicted and sentenced to death.154 Japanese mining officials were also prosecuted by a
British military occupation tribunal in the Far East.155 Although corporations were not formally prosecuted at
Nuremberg, their assets were seized and they were put out of business for violating international law. 156
152
One widely used set of rules for international arbitrations are the Rules of UNCITRAL, the United Nations
Commission on International Trade Law. Effective in 2014, UNCITRAL adopted Rules on Transparency in TreatyBased Investor-State Arbitration. These new rules could also potentially be used or adapted for arbitrations on
business and human rights. They presumptively provide that most written aspects of the proceedings will be made
public. These include the notice of arbitration and response; statements of claim and defense; any further written
statements or submissions by either party; expert reports and witness statements; a list of exhibits (but not
necessarily the exhibits themselves); written submissions by third parties; transcripts of hearings where available;
and any orders, decisions or awards by the tribunal. The Rules permit tribunals to accept third party submissions,
and presumptively provide that evidentiary hearings and oral arguments shall be public. The new Rules are
accessible at http://www.uncitral.org/uncitral/en/uncitral_texts/arbitration/2014Transparency.html. See also United
Nations Convention on Transparency in Treaty-Based Investor Arbitration, adopted 10 Dec. 2014, UNGA Res.
69/116, Annex, art. 2, not yet in force.
153
See generally Matthew Lippmann, War Crimes Trials of German Industrialists …, 9 TEMPLE INT’L & COMP. L.J.
173 (1995).
154
Id., text at notes 79-86.
155
Anita Ramasastry, Corporate Complicity: From Nuremberg to Rangoon-An Examination of Forced Labor Cases
and Their Impact on the Liability of Multinational Corporations 91 Berkeley J. Int'l L. 20 (2002).
156
See generally Amicus Brief of Nuremberg Scholars, in Kiobel v. Royal Dutch Petroleum, U.S. S. Ct. No. 101491, Dec. 21, 2011, accessible at
http://www.americanbar.org/content/dam/aba/publications/supreme_court_preview/briefs/101491_petitioner_amcu_nuremberg_bartov_etal.authcheckdam.pdf.
25
More recently the special international criminal tribunal for Lebanon has gone beyond merely prosecuting
individuals, ruling that corporate defendants can be convicted for criminal contempt of court, 157 while a new
Protocol to the African Court of Justice and Human and Peoples’ Rights (discussed below), once it enters into force,
authorizes criminal prosecutions of corporations for a range of international crimes.
Currently there are at least two models for international criminal prosecutions of gross violations of human
rights involving business. One is the International Criminal Court (“ICC”) in The Hague. 158 The ICC can prosecute
only natural persons159 – including business executives – for a limited range of crimes, namely genocide, war crimes
and crimes against humanity.160 In cases involving business and human rights, this model might be followed, either
by adding a second chamber to the ICC, or by broadening the ICC’s jurisdiction to include legal as well as natural
persons,161 or by creating a separate international criminal court specifically for crimes committed by business or in
which business is complicit.
An alternative model has recently been provided by a 2014 Protocol, not yet in force, to the African Court
of Justice and Human and Peoples’ Rights.162 The Protocol allows international criminal prosecution, not only of
individuals, but also of corporations. A provision on “Corporate Criminal Liability” resolves several issues of
attribution of crimes to corporations, as follows:
1.
“… [T]he Court shall have jurisdiction over legal persons, with the exception of States.”
2.
“Corporate intention to commit an offence may be established by proof that it was the policy of the
corporation to do the act which constituted the offence.”
3.
“A policy may be attributed to a corporation where it provides the most reasonable explanation of the
conduct of that corporation.”
4.
“Corporate knowledge of the commission of an offence may be established by proof that the actual or
constructive knowledge of the relevant information was possessed within the corporation.”
5.
“Knowledge may be possessed within a corporation even though the relevant information is divided
between corporate personnel.”
6.
“The criminal responsibility of legal persons shall not exclude the criminal responsibility of natural
persons who are perpetrators or accomplices in the same crimes.”163
The Protocol grants the African Court jurisdiction over a broad range of crimes, including several which
businesses might well commit. In addition to ICC crimes, the African Court will have jurisdiction over, among
157
Special Tribunal for Lebanon, Appeals Panel, Case No. STL-14-05/PT/AP/AR126.1, Case against New TV
S.A.L. Karma Mohamed Tahsin al Khayat, Decision on Interlocutory Appeal Concerning Personal Jurisdiction in
Contempt Proceedings, 2 Oct. 2014, pars. 33-74.
158
See generally Rome Statute of the International Criminal Court, 17 July 1998, entered into force, 1 July 2002,
2187 U.N.T.S. 3.
159
Id., art. 25.1.
160
Id., arts. 5, 6, 7 and 8.
161
Article 25.1 of the ICC Statute currently provides, “The Court shall have jurisdiction over natural persons
pursuant to this Statute.” As a first step, Article 25.1 could be amended simply by adding the words “and legal”
after the word “natural.” The rest of the text would need to be reviewed to make any corresponding modifications.
However, the process of amending the ICC Statute is difficult, requiring a high degree of consensus. See ICC
Statute arts. 121-23.
162
Protocol on Amendments to the Protocol on the Statute of the African Court of Justice and Human Rights, 27
June 2014, accessible at
http://www.au.int/en/sites/default/files/PROTOCOL%20ON%20AMENDMENTS%20TO%20THE%20PROTOCO
L%20ON%20THE%20AFRICAN%20COURT%20-%20EN_0.pdf.
163
Id. art. 22, adding art. 46C.
26
other crimes, mercenarism, corruption, money laundering, trafficking in persons, trafficking in drugs, trafficking in
hazardous wastes, and illicit exploitation of natural resources. 164
A significant disadvantage of the African Protocol is that, unlike the ICC Statute which disallows official
immunity,165 the African Protocol grants immunity from prosecution before the African Court to “any serving AU
Head of State or Government, or anybody acting or entitled to act in such capacity, or other senior state officials
based on their functions, during their tenure of office.” 166 Especially in cases where corporations or corporate
executives may be accused of acting in complicity with “senior state officials,” objections might be raised to
prosecuting the accomplices, but not the principal perpetrators.
A treaty, of course, need not copy either the ICC or the African Protocol model wholesale. For example,
the African Protocol could be used as a model for an international criminal tribunal on business and human rights,
but without its provision immunizing senior state officials.
6.
Comprehensive treaty:
The foregoing potential elements of a treaty on business and human rights are not mutually exclusive. A
treaty could combine some or all of these elements, and others besides. The more elements are included, the more
effective a treaty might be in ensuring business respect for human rights, and in providing remedies for any
violations. On the other hand, the more ambitious the treaty content, the more difficult it may become to negotiate
and to attract a wide range and large number of States to join the treaty, especially home States of major
transnational corporations, and to appeal to the businesses which often significantly influence State positions.
Where the fault lines may be, and where the trade-off’s might be found, are matters that may best emerge from a
process of dialogue and consultations. In addition to the inter-governmental process soon to begin at the UN, a
global civil society process of consultation has also recently begun.167
C. Policy Coherence Treaties
1.
National Laws:
UN Guiding Principle 8 calls on States to ensure that their institutions that “shape business practices are
aware of and observe the State’s human rights obligations when fulfilling their respective mandates, …” Examples
of State institutions cited by the Commentary include those responsible for “corporate law and securities regulation,
investment, export credit and insurance, trade and labour.” Others might include professional codes regulating the
legal profession.168
It would be a tall order for a global treaty to attempt a comprehensive review and reform of national
legislation and regulation in all of these areas. But agreement might be pursued in particular areas. For example, in
regard to corporate law, to what extent ought parent companies to be responsible for the human rights impacts of
their subsidiaries, including their subsidiaries abroad?169 In regard to public procurement, States might pursue
agreement on common human rights standards and due diligence processes. 170
164
Id. art. 28A.1.
ICC Statute, art. 27.
166
African Protocol, art. 22, adding art. 46A bis.
167
FIDH and ESCR-Net New Joint “Treaty Initiative,” Jan. 30, 2015, accessible at
https://www.fidh.org/International-Federation-for-Human-Rights/globalisation-human-rights/business-and-humanrights/16868-fidh-and-escr-net-new-joint-treaty-initiative.
168
See section V.G. below.
169
See Part V.E below.
170
See, e.g., Report of the Working Group on the issue of human rights and transnational corporations and other
business enterprises, UN Doc. A/HRC/29/28, 28 April 2015, pars. 40-42.
165
27
2.
International Agreements:
UN Guiding Principle 9 provides that “States should maintain adequate domestic policy space to meet their
human rights obligations when pursuing business-related policy objectives with other States or business enterprises,
for instance through investment treaties or contracts.” The Commentary points out that the terms of “bilateral
investment treaties, free-trade agreements or contracts for investment projects … may constrain States from fully
implementing new human rights legislation, or put them at risk of binding international arbitration if they do so. …
States should ensure that they retain adequate policy and regulatory ability to protect human rights under the terms
of such agreements, while providing the necessary investor protection.”
States might agree, for example, to include human rights protections in future investment and trade
treaties.171 They could also agree to treat them as terms of existing treaties, in cases where both States to a dispute
are Parties to the new agreement, or otherwise agree to apply the new provisions in an existing treaty. 172
D. Sectoral Treaties173
The foregoing sections catalogue, illustratively but not exhaustively, various ways that a treaty might
address business with regard to human rights generally. It would also be possible to adopt a narrower treaty,
focusing on a particular sector such as the extractives or information communications technology (ICT) sectors, or
on the business role in regard to particular kinds of human rights abuses. Advantages of a narrower approach might
include greater ease of adoption and ratification, because fewer technical legal issues might have to be resolved, and
diplomatic consensus might be more readily reached. Disadvantages would include incompleteness of coverage, as
well as potentially burdensome selectivity in regard to a particular industry. This, in turn, could adversely affect the
interests of some States more than others.
V.
SELECTED KEY ISSUES.
In deciding among and fleshing out treaty options, a number of cross-cutting issues will need to be
considered. The following issues are not a comprehensive list, but are among the most prominent and contentious.
They include:

What companies are to be regulated – transnational corporations, large corporations, or all corporations?
What will be the responsibility of State-owned enterprises?

What human rights norms will the treaty enforce against business – jus cogens, customary international
law, human rights treaties in States that are parties to those treaties, or the norms specified by the UN
Guiding Principles (the International Bill of Human Rights, the ILO Declaration of Fundamental Labor
Rights, plus others in context)?
171
See generally Report of the Working Group on the issue of human rights and transnational corporations and other
business enterprises, UN Doc. A/HRC/29/28, 28 April 2015, pars. 18-28 (investment), 29-31 (international
investment agreements and dispute settlement), 32-35 (transparency in international arbitration) and 36-39 (trade
agreements and trade-related issues).
172
For examples of new treaties adding terms to existing treaties, see, e.g., United Nations Convention on
Transparency in Treaty-Based Investor Arbitration, adopted 10 Dec. 2014, UNGA Res. 69/116, Annex, art. 2, not
yet in force; Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, 10 Dec.
1984, entered into force, 26 June 1987, 1465 U.N.T.S. 85, art. 8 (Torture offenses “shall be deemed to be included
as extraditable offenses in any extradition treaty existing between States Parties.”)
173
The Human Rights Council Resolution establishes the Intergovernmental Working Group on “a” legally binding
instrument, for the purpose of elaborating “an” international legally binding instrument. UN HRC Res. 26/9, 26 June
2014, Elaboration of an international legally binding instrument on transnational corporations and other business
enterprises with respect to human rights, par. 1. Hence it appears that further HRC authority might be needed for the
Working Group to elaborate more than one treaty.
28

What substantive norms will the treaty impose for civil damages claims – international human rights law or
domestic tort/delict standards? Will the treaty defer to international, regional or national legal standards for
concepts such as complicity, or refer instead to general principles of law?

Extraterritorial jurisdiction: Will States be expressly authorized or required to exercise jurisdiction over
human rights violations committed outside their territories by companies domiciled in the State?

What is the scope of corporate responsibility: In what circumstances will parent companies be liable for
wrongs committed by subsidiaries, and vice versa?

Duty bearers: Will the treaty impose direct obligations only on States, or will it impose direct obligations
on business as well?

Lawyers and business advisors: Will the treaty ensure policy coherence between their human rights
responsibilities and their professional codes of conduct and ethics?
The following sections address these topics in sequence:
A. What companies are to be regulated – transnational corporations, large corporations, or all corporations?
The recurrent heading of UN Human Rights Council resolutions on business and human rights has been
“transnational corporations and other business enterprises.” (Emphasis added.) The Guiding Principles explicitly
apply to “all” business enterprises:
“The responsibility of business enterprises to respect human rights applies to all enterprises regardless of
their size, sector, operational context, ownership and structure. Nevertheless, the scale and complexity of
the means through which enterprises meet that responsibility may vary according to these factors and with
the severity of the enterprise’s adverse human rights impacts.” 174
Yet as noted above, even though the Council’s June 2014 resolution initiating the treaty process repeats the
phrase, “transnational corporations and other business enterprises,” a footnote in the preamble defines “other
business enterprises” to include only those which have a “transnational character in their operational activities.” The
footnote expressly excludes “local businesses registered in terms of relevant domestic law.”175
This ambivalent narrowing of scope – from all business enterprises to only transnational corporations -- has
been widely criticized, by both States and civil society, as disfiguring the business and human rights agenda.
Ruggie’s critique is illustrative:
“A footnote defines ‘other business enterprises’ in a way that is intended to exclude national companies.
Thus … the proposed treaty would have covered international brands purchasing garments from the
factories … in the collapsed Rana Plaza building in Bangladesh, but not the local factory owners …
employing the more than 1,100 workers who died ….”
“The core sponsors of the resolution may have found this formulation to be useful in putting together their
voting coalition. But it poses two enormous impediments to future progress. First, an exclusive focus on
transnational corporations has always triggered strong opposition from their home countries, … as well as
from international business. … [I]t has also dampened the enthusiasm of civil society organizations for the
initiative. … because for victims the corporate form of the abuser is irrelevant.”
174
UN Guiding Principle 14.
UN HRC Res. 26/9, 26 June 2014, Elaboration of an international legally binding instrument on transnational
corporations and other business enterprises with respect to human rights, par. 9. UN HRC Res. 26/9, 26 June 2014,
Elaboration of an international legally binding instrument on transnational corporations and other business
enterprises with respect to human rights, note one.
175
29
“Second, the definition of ‘other business enterprises’ … makes no sense either in logical or legal terms. …
[T]here is no meaningful distinction between ‘transnational corporations’ and ‘enterprises that have a
transnational character.’ … More importantly, transnational corporations’ subsidiaries are typically
required to incorporate under ‘relevant domestic law,’ often in joint ventures, including with state-owned
enterprises or … local businesses. … How do all these structures and relationships get disentangled?
…”176
Given the breadth of opposition to excluding national corporations from the treaty, this issue is likely to be
raised during the negotiations. (This is a distinct issue from whether specific types of companies (e.g., Small and
Medium Enterprises (“SME’s”), or State owned enterprises) would be exempt from specific treaty requirements, or
might be given a different timeline or scope of compliance with obligations.)
B. What human rights norms will the treaty enforce against business – jus cogens, customary international
law, human rights treaties in States Parties to those treaties, or the norms specified by the UN Guiding
Principles (the International Bill of Human Rights, the ILO Declaration of Fundamental Labor Rights, plus
others in context)?
The range of human rights covered by the treaty may depend on the kinds of duties imposed by the treaty,
or even by particular provisions of the treaty. To the extent the treaty focuses on reporting, planning, or
implementing the Guiding Principles, it should cover a broad range of rights. As John Ruggie concluded after
analyzing more than 300 reports of alleged corporate abuses, “there are few if any internationally recognized rights
business cannot impact - or be perceived to impact - in some manner. Therefore, companies should consider all such
rights.”177 Hence the Commentary to Guiding Principle 12 enjoins:
“Because business enterprises can have an impact on virtually the entire spectrum of
internationally recognized human rights, their responsibility to respect applies to all such
rights. In practice, some human rights may be at greater risk than others in particular
industries or contexts, and therefore will be the focus of heightened attention. However,
situations may change, so all human rights should be the subject of periodic review.”
Guiding Principle 12 recognizes the business responsibility to respect, at minimum, all rights articulated in
the International Bill of Human Rights and the ILO Declaration of Fundamental Principles and Rights at Work. 178
The International Bill of Human Rights includes the 1948 Universal Declaration of Human Rights, 179 the 1966
International Covenant on Civil and Political Rights,180 and the 1966 International Covenant on Economic, Social
and Cultural Rights.181 Together these three instruments cover a broad range of rights. The ILO Declaration
addresses specific workplace rights: freedom of association, prohibitions on child labor and forced labor, and nondiscrimination.
These constitute the minimum catalogue of rights for purposes of human rights due diligence. In addition,
the Commentary to Guiding Principle 12 explains:
“Depending on circumstances, business enterprises may need to consider additional standards. For instance,
… [UN] instruments have elaborated further on the rights of indigenous peoples; women; national or
ethnic, religious and linguistic minorities; children; persons with disabilities; and migrant workers and their
176
John Ruggie, Quo Vadis? Unsolicited Advice to Business and Human Rights Treaty Sponsors, Sept. 9, 2014,
Institute for Human Rights and Business, accessible at http://www.ihrb.org/commentary/quo-vadis-unsolicitedadvice-business.html.
177
John Ruggie, Protect, Respect and Remedy: a Framework for Business and Human Rights, UN Doc. A/HRC/8/5,
7 April 2008, par. 52.
178
The Declaration, together with an explanatory report, is accessible at http://www.ilo.org/wcmsp5/groups/public/--ed_norm/---relconf/documents/meetingdocument/wcms_176149.pdf.
179
10 December 1948, accessible at http://www.un.org/en/documents/udhr/.
180
Adopted, 16 December 1966, entered into force, 23 March 1976, 993 U.N.T.S. 171.
181
Adopted, 16 December 1966, entered into force, 3 Jan. 1976, 993 U.N.T.S. 3.
30
families. Moreover, in situations of armed conflict enterprises should respect the standards of international
humanitarian law.”
For treaties focused on reporting, planning, or implementation of the Guiding Principles, then, the coverage
of rights should be very broad. On the other hand, to the extent a treaty establishes an individual complaint
procedure, or provides for civil damages remedies, the list of human rights that can be invoked through such
procedures might be narrowed to the kinds of rights – still a broad list – reasonably “justiciable” in similar
proceedings against States.182 Such an adjustment would have to be undertaken with care, because even rights that
might appear less compelling in other contexts (e.g., the right to leisure) can be serious in a business context where
workers can be subjected to long hours with little or no rest.
Finally, to the extent a treaty imposes criminal sanctions, it would apply, not to all human rights violations,
but only to violations caused by the commission of an existing international crime, 183 or conceivably by a new
international crime recognized and defined by the treaty, or by a national crime that affects human rights.184 If
criminal prosecution were the only approach adopted, it would exclude most human rights infringements by
business.
A single treaty could of course employ different menus of rights: a full range for planning provisions, a
somewhat narrower range for civil complaints, and a much narrower range for criminal prosecutions.
C. What substantive norms will the treaty impose for civil damages claims – international human rights law,
or common law tort standards or, in civil law countries, the civil law equivalent? Will the treaty defer to
national legal standards for concepts such as complicity or refer to general principles of international law?
A number of suits for money damages have been brought in English courts against British companies for
human rights violations committed in other countries based, not on international human rights law, but on common
law tort theories such as trespass and negligence. Several settlements have resulted. 185 Following the decision of the
US Supreme Court in 2013 in Kiobel v. Royal Dutch Petroleum, 186 which narrowed jurisdiction over human rights
suits under the federal Alien Tort Statute, suggestions have been made to seek damages for overseas human rights
violations by filing common law tort suits in US state courts.187 Plaintiffs are now bringing common law tort claims
in Canada with respect to the conduct of extractive companies overseas. 188
It has been argued that, if a civil damages remedy in national courts is permitted or required by a treaty, it
could be more effective in practice, at least in common law countries, if it were based on reasonably wellunderstood common law torts, with which common law judges are already familiar and comfortable, than on novel
definitions of damages actions based directly on international human rights law. 189 In effect it is argued that, since
common law tort actions have succeeded in practice, Why argue with success?
182
See sections IV.A.7, IV.B.2, and IV.B.3 above.
See section IV.B.5 above.
184
The Statutes of some international criminal tribunals allow for the prosecution of certain national as well as
international crimes. E.g., the Statute of the Special Tribunal for Lebanon, art. 2.1 (a), grants the Tribunal
jurisdiction over “[t]he provisions of the Lebanese Criminal Code relating to … terrorism, crimes and offences
against life and personal integrity, illicit associations and failure to report crimes and offences, …” (Accessible at
http://www.stl-tsl.org/en/documents/un-documents/un-security-council-resolutions/security-council-resolution1757.) Likewise Article 5 of the Statute of the Special Court for Sierra Leone granted the Court jurisdiction over
“crimes under Sierra Leonean law,” including abuse or abduction of girl children and arson. (Accessible at
http://www.rscsl.org/Documents/scsl-statute.pdf.)
185
See generally Richard Meeran, Tort Litigation against Multinational Corporations for Violation of Human
Rights: An Overview of the Position Outside the United States, 3 CITY UNIV. HONG KONG L. REV. 1 (2011).
186
133 S. Ct. 1659 (2013).
187
E.g., Roger Alford, The Future of Human Rights Litigation after Kiobel, 89 NOTRE DAME L. REV. 1749 (2014).
188
Susana C. Mijares Peña, Human Rights Violations by Canadian Companies Abroad: Choc v Hudbay Minerals
Inc., 5 UWO J LEG STUD 3 (2014), accessible at <http://ir.lib.uwo.ca/uwojls/vol5/iss1/3>.
189
See Meeran, note 185 above, at 24 (“This approach of invoking tort law involves allegations of negligence rather
than human rights violations, which could be regarded as diminishing the significance of the harm, but on the other
183
31
On the other hand, even where they result in payment of money damages, common law tort actions may not
do justice to the gravity of the invasion of human dignity occasioned by gross violations of human rights. They may
also be frustrated by procedural obstacles under national laws, such as short statutes of limitations, that should not
apply to treaty-based actions for serious human rights violations. 190 In addition, civil remedies for violations of
human rights may also be more congruent than common law torts with a comprehensive treaty enforcing
international human rights law, and more uniform among potential States Parties with varying legal traditions (e.g.,
common law, civil law, Islamic law). And even with tort law as a basis for redress, the legal standards for what
gives rise to liability (e.g., claims of negligence, intentional torts, standards for accomplice liability, etc., may vary
somewhat from jurisdiction to jurisdiction.)
This is an issue treaty drafters may wish to consider. One potential solution might be for a treaty to
contemplate both kinds of remedies – human rights suits and national tort suits (or other national damages remedies)
– as vehicles to secure civil justice for victims of business violations of human rights. 191
D. Extraterritorial jurisdiction: Will States be expressly authorized or required to exercise jurisdiction over
human rights violations committed outside their territories by companies domiciled in the State?
Where a host State is unwilling or unable to provide victims access to effective remedies for human rights
violations by a foreign company operating in its territory, should the treaty require the company’s home State to
exercise jurisdiction? If the answer is “no,” then victims may continue to be deprived of effective remedies. Even if
an international tribunal on business and human rights were to be established, history teaches that most international
courts have limited resources and can hear only a relatively limited number of cases. 192 National justice cannot be
abandoned altogether.
Guiding Principle 2 does not quite answer the question of a home State’s extraterritorial jurisdiction: It
provides that “States should set out clearly the expectation that all business enterprises domiciled in their territory
and/or jurisdiction respect human rights throughout their operations.” But must States embody this extraterritorial
“expectation” in law and practice?
The Commentary is more specific, taking the view that extraterritorial jurisdiction is permissive, but not
mandatory:
“At present States are not generally required under international human rights law to regulate the
extraterritorial activities of businesses domiciled in their territory and/or jurisdiction. Nor are they generally
prohibited from doing so, provided there is a recognized jurisdictional basis.”
The Commentary to Guiding Principle 2 does recognize that “some human rights treaty bodies recommend
that home States take steps to prevent abuse abroad by business enterprises within their jurisdiction.” Increasingly,
hand has the advantages of simplicity and being potentially applicable to fundamental human rights violations as
well as violations of socio-economic rights … ”)
190
E.g., Int.Am.Ct.H.Rts., Barrios Altos v. Peru, Judgment of March 14, 2001, Series C, No. 75, par. 41 (“provisions
on prescription,” i.e., statutes of limitations); Basic Principles on the Right to a Remedy and Reparation …, UNGA
Res. 60/147. UN Doc. A/RES/60/147, 21 March 2006, Annex, pars. 6 and 7 (re statutes of limitations).
191
For a discussion of the varying ways States have incorporated the right of victims to seek a remedy for human
rights abuses committed by natural persons, see Beth Stephens, Translating Filártiga: A Comparative and
International Law Analysis of Domestic Remedies for International Human Rights Violations, 27 YALE J. INT’L L.
1 (2002), Accessible at SSRN: http://ssrn.com/abstract=2125469
192
An arguable exception is the European Court of Human Rights, which has 47 full-time judges and an annual
budget of nearly $90 million. To the extent the UN, or the States Parties to a treaty, were willing to provide that
level of human and financial resources, an international court on business and human rights could take on more of
the burden of justice. (The European Court’s 2013 budget of 66.8 million euros is accessible at
http://www.echr.coe.int/Pages/home.aspx?p=court/howitworks&c=#newComponent_1346157778000_pointer. At
the June 24, 2013 exchange rate of one euro = $1.31, that amounted to $86.7 million.)
32
however, the International Court of Justice,193 global and regional human rights treaty bodies, and UN thematic
experts interpret human rights treaties not merely to permit, but to impose extraterritorial obligations, including with
regard to regulation of business activities abroad.194
There is no doubt that States have the right to exercise extraterritorial jurisdiction over their own
companies. In the United States Supreme Court litigation in the Kiobel case, the United Kingdom and Dutch
governments—which as amici curiae opposed the exercise of US extraterritorial Alien Tort Statute (“ATS”)
jurisdiction over UK and Dutch companies195—nonetheless agreed that “active personality jurisdiction,” by which
the United States could apply the ATS extraterritorially to Americans, “is very clearly asserted (and accepted) in
State practice, and is well established in international law.” 196 Calling the same principle by a different name, the
European Commission termed the “nationality principle” an “uncontroversial basis for jurisdiction under
international law.”197
Granted, any exercise of extraterritorial jurisdiction by a home State must be “reasonable” – paying due
regard to the jurisdictional claims and sovereignty of the host State – but it is well-accepted under international law
that, in principle, home States may adjudicate suits against their own companies (as opposed to foreign companies)
for human rights violations committed outside their territories. 198
International law, then, plainly allows States to engage in reasonable exercises of jurisdiction over the
conduct of their corporations in other States. A treaty on business and human rights, or a protocol thereto, could
either explicitly authorize or require States to exercise such extraterritorial jurisdiction. The treaty or protocol could
undertake to articulate guidelines on the parameters of “reasonableness,” or instead allow courts or legislatures to
decide on the reasonableness of particular exercises of extraterritorial jurisdiction, in light of general principles of
international law governing jurisdiction. 199
E. What is the scope of corporate responsibility – Will parent companies be liable for the wrongs of
subsidiaries, and vice versa?
193
ICJ, The Legal Consequences of the Construction of a Wall in the Occupied Palestinian Territory (Advisory
Opinion) [2004] ICJ Rep., p. 136, par. 109.
194
See generally ESCR-Net, Global Economy, Global Rights: A Practitioner’s Guide for Interpreting Human Rights
Obligations in the Global Economy (2014).
195 See Brief of the Governments of the Kingdom of the Netherlands and the United Kingdom of Great Britain and
Northern Ireland as Amici Curiae in Support of Neither Party at 5–6, 18–23, Kiobel v. Royal Dutch Petroleum Co.,
133 S. Ct. 1659 (2013) (No. 10-1491).
196 Id. at 14. For example, Canadian courts have presumptive jurisdiction over foreign torts where the defendant is
“domiciled or resident” in Canada. Club Resorts Ltd. v. Van Breda, [2012] 1 S.C.R. 572, paras. 81–82, 85–86,
90(a) (Can.).
197 European Commission Amicus Brief in Kiobel v. Royal Dutch Petroleum Co., 133 S. Ct. 1659 (2013) (No. 101491), at 11. EU law, governing the twenty-eight EU member States, Countries, EUROPA, http://europa.eu/abouteu/countries/index_en.htm (last visited Feb. 12, 2014), and other European States who join the regulations
voluntarily, makes jurisdiction turn mainly on domicile. The EU default rule is that “persons domiciled” in an EU
State “shall, whatever their nationality, be sued in the courts of” the domiciliary State. Council Regulation 44/2001
of 22 December 2000 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial
Matters, arts. 2.1, 3.1, 2001 O.J. (L 12) 1, 3–4 (EC); Council Decision 2007/712/EC of 15 October 2007 on the
Signing, on Behalf of the Community, of the Convention on Jurisdiction and the Recognition and Enforcement of
Judgments in Civil and Commercial Matters, arts. 2, 3.1, 2007 O.J. (L 339) 3. In tort cases they may also be sued in
the State where the “harmful event” takes place. Brussels I Regulation, art. 5.3; Lugano II Convention, art. 5.3.
198
See generally D. Cassel, Suing Americans for Human Rights Torts Overseas: The Supreme Court Leaves the
Door Open, 89 NOTRE DAME L. REV. 1773, 1778-79 (2014).
199
See, e.g., RESTATEMENT (THIRD) OF THE FOREIGN RELATIONS LAW OF THE UNITED STATES
(1987). Compare § 402 (jurisdiction to prescribe) and § 421 (jurisdiction to adjudicate), with § 431(1) (jurisdiction
to enforce judicially). All three categories authorize states to exercise jurisdiction over acts abroad by their own
nationals, §§ 402(2), 421(2)(d)–(e), and 431(1), subject to the limit that the exercise be reasonable. Id. §§ 403,
421(1)–(2), and 431(1)–(2).
33
In what circumstances should a treaty hold parent companies responsible for the actions of their
subsidiaries or other corporate entities, and vice versa? The answer may depend on the kinds of duties the treaty
imposes. To the extent a treaty mandates reporting, planning and prevention, including implementation of the
Guiding Principles, it might not be controversial or impracticable to require parent companies to make sure that their
subsidiaries (and other corporate entities, especially controlled entities) meet these responsibilities.
This seems to be the approach of the Guiding Principles. They generally refer to the responsibilities, not of
a particular “corporation” or “company,” but of a “business enterprise.” The term “enterprise” is not defined.
However, the language and logic of the Principles suggest that it embraces both a parent company and its
subsidiaries. For example, the Commentary to Guiding Principle 2 cites, as an example of domestic measures with
extraterritorial implications, “requirements on ‘parent’ companies to report on the global operations of the entire
enterprise.” This would make no sense unless the concept of “enterprise” included both parent companies and their
subsidiaries.
The issue becomes more complicated to the extent a treaty mandates civil damages remedies against
corporations. Most States have adopted, in one form or another, the separate entity doctrine. When one corporation
invests in another – even when the first company owns 100% of the shares of the second, as in the case of parent
companies with wholly owned subsidiaries – the two corporations are still treated as separate entities for purposes of
legal liability. National laws typically provide, then, that the parent cannot be held legally liable for wrongs
committed by the subsidiary (i.e., the “corporate veil” cannot be pierced), unless the subsidiary is shown to be a
mere façade or was created solely in order to defraud creditors. 200
Recent developments in common law cases indicate that, in some limited circumstances, a parent company
can be held to have a “duty of care” to the employees of a subsidiary, or to persons injured by a subsidiary, the
breach of which can result in legal liability. 201 In such cases the parent is held liable, not for the misconduct of its
subsidiary, but rather for its own misconduct in breaching its duty of care. Negotiators might consider incorporating
such a doctrine into a treaty.
Negotiators might also consider a broader parental company duty of care in regard to human rights.
Without abrogating the general application of the doctrine of separate entity, negotiators might consider the
following recommendation made by three distinguished scholars, in the particular context of a parent company’s
human rights due diligence:
“[T]he duty of the parent company to exercise due diligence by controlling the subsidiary to ensure it does
not engage in human rights violations, directly or indirectly, should be clearly affirmed. This should be seen
as part of the due diligence necessary to meet the corporate responsibility to respect human rights, as set out
in the UNGPs. The concept … amounts to imposing on the parent company a duty to monitor the activities
of its subsidiaries, … This also includes the responsibility that all businesses seek to prevent and mitigate,
through use of their leverage, all human rights violations by those with whom they have a business
relationship. In contrast to the limited liability approach, this incentivizes the parent company to ensure that
its subsidiaries and business partners comply with human rights.” 202
This scholarly recommendation is consistent, not only with the “enterprise” approach of the UN Guiding
Principles to due diligence, but also with the even more explicit “enterprise” approach of the OECD Guidelines for
Multinational Enterprises. In calling on business to respect human rights and to carry out due diligence, 203 the
200
See, e.g., Presbyterian Church of Sudan et al. v. Talisman Energy Inc., 453 F. Supp. 2d 633 (S.D.N.Y. 2006),
affirmed, 582 F. 3d 244 (2d Cir. 1999); see generally G. Skinner, R. McCorquodale and O. De Schutter, The Third
Pillar: Access to Judicial Remedies for Human Rights Violations by Transnational Business (2013), pp. 59-64.
201
Compare England and Wales Court of Appeal, Chandler v. Cape PLC, [2012] EWCA Civ 525 (25 April 2012),
par. 80, and Superior Court of Justice of Ontario, Choe v. HudBay Minerals, Inc., 2013 ONSC 1414, Decision of 22
July 2013, pars. 74-75, with District Court of The Hague, Akpan v. Royal Dutch Shell PLC, Case No.
C/09/337050/HA ZA 09-1580, Judgment, 30 Jan. 2013 (2013), pars. 3.31, 3.32.
202
G. Skinner, R. McCorquodale and O. De Schutter, The Third Pillar: Access to Judicial Remedies for Human
Rights Violations by Transnational Business (2013), p. 68.
203
OECD Guidelines (2011), pars. II.2, II.10, and Chapter IV.
34
OECD Guidelines “extend to enterprise groups, although boards of subsidiary enterprises might have obligations
under the law of their jurisdiction of incorporation. Compliance and control systems should extend where possible
to these subsidiaries. Furthermore, the board’s monitoring of governance includes continuous review of internal
structures to ensure clear lines of management accountability throughout the group.” 204
F.
Duty bearers: Will the treaty impose direct obligations only on States, or will it impose direct obligations
on business as well?
During the drafting process of the UN Guiding Principles, reports John Ruggie, governments North and
South “had deep seated doctrinal concerns about making corporations subjects of international human rights law.” 205
The US statement of objections to the June 2014 UN Human Rights Council treaty resolution included an assertion
that business corporations are not “subjects” of international law.206
There are competing schools of thought among eminent scholars on whether corporations are subjects of
international law.207 Positivists insist that corporations are not subjects of international law, because no international
instrument expressly recognizes them as such. 208 More flexible interpreters suggest that corporations may at least
have “limited international legal personality.” 209 Finally, pragmatists argue that the issue of whether corporations are
“subjects” of international law is irrelevant to the question of what legal responsibilities can be imposed on
corporations: “Skepticism about the ‘personhood’ of corporations should not be confused with doubts about whether
international corporations have responsibilities (as well as rights) under international law. Clearly they now have
both.”210
At present, thousands of bilateral and multilateral investment and trade agreements grant corporations both
substantive rights (e.g., regulatory stability, compensation for property takings, and due process of law) and
remedial rights to sue States before international arbitration panels.211 Under the European Convention on Human
Rights, corporations are also permitted to make claims against States for property takings and denials of due process
of law before the European Court of Human Rights. 212 EU treaties also permit corporations to bring cases before the
European Court of Justice, if their rights have been infringed by an EU institution. 213
Whatever one’s view on whether corporations are “subjects” or “legal persons” under international law, if
international treaties can grant corporations rights and remedies, as in these instances, it is difficult to discern why a
treaty cannot also impose human rights duties on corporations, enforceable before national or international courts.
Whether a treaty on business and human rights should impose duties directly on companies would appear to be a
policy choice to be made by the negotiators, one way or the other, and not a decision determined by current
international law.
G. What is the Role of Lawyers and other Business Advisors?
204
OECD Guidelines (2011), Commentary on General Policies, par. 9.
John Ruggie, Response to RAID “Executive Summary”, 23 March 2015, p. 1, accessible at http://businesshumanrights.org/sites/default/files/documents/Ruggie%20response%20to%20RAID.pdf.
206
Note 45 above.
207
See generally Jose Alvarez, Are Corporations “Subjects” of International Law?, 9 SANTA CLARA J. INT’L. LAW 1
(2011).
208
See Decl. of James Crawford S.C., Presbyterian Church of Sudan v. Talisman Energy Inc., Republic of Sudan,
453 F. Supp. 2d 633 (S.D.N.Y. 2006).
209
Andrew Clapham, HUMAN RIGHTS OBLIGATIONS OF NON-STATE ACTORS 79 (2006).
210
Alvarez, note 207 above, at 31 (footnote omitted).
211
See generally Public Citizen, Case Studies: Investor-State Attacks on Public Interest Policies (2014), accessible
at http://www.citizen.org/documents/egregious-investor-state-attacks-case-studies.pdf.
212
See generally, e.g., W. van den Muijsenbergh and S. Rezai, Corporations and the European Convention on
Human Rights (2012), accessible at
http://www.mcgeorge.edu/Documents/Conferences/GlobeJune2012_Corporationsandthe.pdf.
213
http://europa.eu/about-eu/institutions-bodies/court-justice/index_en.htm
205
35
The legal profession has been among civil society actors promoting implementation of the Guiding
Principles. The American Bar Association (“ABA) has endorsed the Guiding Principles.214 The Business and
Human Rights Advisory Group of the Law Society has recommended, among other measures, that the Law Society
take the position that its law firm members have a responsibility to respect human rights, and that they should
develop policies and procedures to implement that responsibility. 215 The International Bar Association has published
pilot guidance for bar associations and business lawyers. 216
Law firms and other business advisors, such as consulting and risk management firms, have at least a dual
responsibility with regard to human rights: both as businesses themselves, and as advisors to their business
clients.217 While the ethical rules of the ABA, at least, “may well” affirmatively support these human rights
responsibilities,218 a treaty might commit States to ensure policy coherence between the human rights
responsibilities of lawyers, law firms and other business advisors, and their duties under professional codes of
conduct and ethics promulgated by bar associations and State entities.
CONCLUSION
This Paper seeks, not to advocate, but to inform. It takes no position on the advisability of a treaty on
business and human rights, or on the form and content of any such treaty. It is offered in the belief that an informed
negotiating process deserves, at the outset, a basic knowledge of the background that brought negotiators to the
table, and an awareness of the main options, issues and choices that lie before them. It is in that spirit that this Paper
has been prepared.
This Paper also provides analysis of the current policy landscape and context as the treaty process begins.
This landscape, however, is constantly shifting, as States, civil society and businesses engage in further actions in
relation to business and human rights.
214
The ABA resolution and accompanying report are accessible at
www.americanbar.org/content/dam/aba/administrative/house_of_delegates/resolutions/2014_hod_annual_meeting_
109.authcheckdam.pdf.
215
Law Society, Business and Human Rights Advisory Group Recommendations, Jan. 2014, p. 13, Recs. 1 and 6.
See also the Council of Bars and Law Societies, Corporate Responsibility and the Role of the Legal Profession,
accessible at www.ccbe.eu/fileadmin/user_upload/NTCdocument/EN_07022013_CSR_and_ 1_ 1361955115.pdf
216
Int’l Bar Association (“IBA”), Business and Human Rights Guidance for Bar Associations, and its Annex,
Guidance for Business Lawyers on the UN Guiding Principles on Business and Human Rights (2014).
217
IBA, Guidance for Business Lawyers, note 216 above, pp. 16-18.
218
“ABA Model Rule of Professional Conduct 2.1 may well apply in this context. It requires lawyers to exercise
‘independent professional judgment and render candid advice’ and permits them to ‘refer not only to law but to
other considerations such as moral, economic, social and political factors that may be relevant to the client's
situation.’ … This imperative logically would include applicable international standards in the conduct of a client’s
affairs, including the Framework and Guiding Principles where corporate clients are concerned.”
”. ABA report, note 214 above, at 5 n. 16 (citation omitted).
36